CLUSTER DEVELOPMENT BASED AGRICULTURE TRANSFORMATION PLAN VISION- 2025 Cucumber Cluster Feasibility and Transformation Study
Planning Commission of Pakistan, Ministry of Planning, Development & Special Initiatives
February 2020
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FOREWORD
In many developed and developing countries, the cluster-based development approach has become the basis for the transformation of various sectors of the economy including the agriculture sector. This approach not only improves efficiency of development efforts by enhancing stakeholders’ synergistic collaboration to resolve issues in the value chain in their local contexts, but also helps to gather resources from large number of small investors into the desirable size needed for the cluster development. I congratulate the Centre for Agriculture and Bioscience International (CABI) and its team to undertake this study on Feasibility Analysis for Cluster Development Based Agriculture Transformation. An important aspect of the study is the estimation of resources and infrastructure required to implement various interventions along the value chain for the development of clusters of large number of agriculture commodities. The methodology used in the study can also be applied as a guide in evaluating various investment options put forward to the Planning Commission of Pakistan for various sectors, especially where regional variation is important in the project design.
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FOREWORD
To improve enhance Pakistan’s competitiveness in the agriculture sector in national and international markets, the need to evaluate the value chain of agricultural commodities in the regional contexts in which these are produced, marketed, processed and traded was long felt. The Planning Commission of Pakistan was pleased to sponsor this study on the Feasibility Analysis for Cluster Development Based Agriculture Transformation to fill this gap. The study aims to cover a large number of agriculture commodities spread in various clusters throughout the country.
I truly hope that the policies, strategies, and interventions suggested in this report will facilitate the federal and provincial governments to chalk out and implement plans for cluster-based transformation of the agriculture sector.
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FOREWORD
This is part of the series of studies on 33 agriculture commodities undertaken for the purpose of preparing a cluster-based transformation plan based on the regional realities in the entire value chain including production, processing, value addition, and marketing. I congratulate the whole team of the project especially the Team Lead, Dr. Mubarik Ali to undertake and successfully complete this monumental study. We are thankful to all commodity specialists who have contributed to this assignment. The CABI Project officers Mr. Yasar Saleem Khan and Ms. Aqsa Yasin deserve appreciation. I truly believe that this study will serve as a basis to make and implement plans for cluster-based agriculture transformation. I hope you will enjoy reading the study and it can help you making your investment decisions along the value chain of various agriculture commodities.
Dr. Babar Ehsan Bajwa Regional Director CAB International
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FOREWORD
This report is part of the series of studies on 33 agriculture commodities to prepare the agriculture transformation plan by incorporating regional realities at the cluster level. In the report, the clusters of various commodities are identified and characterized, and viable investment options along the value chain of each cluster are proposed. For this purpose, the study team has analyzed macro data, reviewed the literature, and made extensive consultation with stakeholders along the value chain. Internationally reputed foreign/ local consultants like Dr. Derek Byerlee, Dr. Kijiro. Otsuka and national consultant Mr. Sohail Moghal were also engaged to understand the cluster-based development approach and conduct cluster-based feasibility analysis. An EXCEL-based Model was developed which was validated by our national consultants. Separate viabilities for individual technologies and products suggested in each commodity are also estimated.This humongous task would not have been possible to complete without the excellent cooperation and facilities provide by CABI, the hard work of commodity specialists and our research team especially Mr. Yasar Saleem Khan and Ms. Aqsa Yasin. The true reward of our hard work is the implementation of the proposed policies, strategies and interventions to develop agriculture commodity clusters in the country.
Dr. Mubarik Ali Team Leader Cluster Development Based Agriculture Transformation Plan-Vision 2020 Project Planning Commission of Pakistan and CAB International
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ACKNOWLEDGEMENT
It is not possible to mention the names of all those who collaborated with us in completing this report, but my foremost gratitude goes to numerous stakeholders along the value chain who generously shared the information about barley production, marketing, trade and value chain. Without their support, this report would not have reached to the level of present quality.
My sincere thanks go to Planning Commission of Pakistan for this initiative and especially financial assistance to complete the project activities. Here I am especially thankful to Dr. Muhammad Azeem Khan (Ex-Member, Food Security and Climate Change, Planning Commission of Pakistan), Dr. Aamir Arshad (Chief Agriculture, Planning Commission of Pakistan), Mr. Muhammad Akram Khan (Project Director; CDBAT project) and other CDBAT project team member Mr. Muhammad Arif (Research Associate) and Dr. Habib Gul (Research Associate) for successful coordination and support for the project.
I am also grateful to Centre for Agriculture and Bioscience International (CABI) and it’s Regional Director for Central and West Asia, Dr. Babar Ehsan Bajwa and CABI team especially Mr. Yasar Saleem Khan for selecting me as commodity specialist for this task and offering outstanding cooperation, support and advice during all the stages of this project. However, the research team takes the responsibility of any shortcoming left in the report.
Dr. Muhammad Tariq Senior Author
Citation:
Tariq, Muhammad., Ali Mubarik, and Yasin Aqsa, (2020) Cucumber Cluster Feasibility and Transformation Study. In Ali Mubarik, (ed.) (2020) Cluster Development Based Agriculture Transformation Plan Vision-2025. Project No. 131(434)PC/AGR/CDBAT-120/2018. Unpublished Report, Planning Commission of Pakistan, Islamabad, Pakistan and Centre for Agriculture and Biosciences International (CABI), Rawalpindi, Pakistan.
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DISCLAIMER This report is prepared by using the data from various published and unpublished sources and that obtained during the consultations with stakeholders. The research team took utmost care to arrive at the figures to be used, but is not responsible for any variation of the data in this report than those reported in other sources. Moreover, the views expressed in this report are purely of the authors and do not reflect the official views of the Planning Commission of Pakistan, Ministry of Planning Development and Special Initiatives or the Centre for Agriculture and Bioscience International (CABI).
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TABLE OF CONTENTS FOREWORD ...... 6 ACKNOWLEDGEMENT ...... 7 TABLE OF CONTENTS……………………………………………………………………… 9 LIST OF TABLES ...... 11 LIST OF FIGURES ...... 11 LIST OF ACRONYMS ...... 12 EXECUTIVE SUMMARY ...... 14 1. INTRODUCTION...... 17 1.1 Cucumber as a fruit vegetable ...... 17 1.2 National Cucumber Production ...... 17 1.3 Global Context ...... 19 2. OBJECTIVES ...... 23 3. METHODOLOGY...... 24 4. LITERATURE REVIEW ...... 25 5. CLUSTER IDENTIFICATION AND CHARACTERIZATION ...... 27 5.1. Identification of Clusters ...... 27 ...... 28 5.2. Comparison of Cluster Characteristics ...... 28 5.3. Description of value chain ...... 32 5.4. SWOT Analysis ...... 35 5.4.1. Overview ...... 35 5.4.2. SWOT Analysis of Southern Punjab ...... 35 5.4.3. SWOT Analysis of Balochistan ...... 39 6. CHALLENGES FACED BY THE CLUSTER ...... 44 6.1 Climate Change and Increasing Shortages of Water ...... 44 6.2 Constraints at Production Level ...... 44 6.3 Constraints at Post-Harvest Level ...... 45 6.3.1. Value addition ...... 45 6.3.2. Constraints at Processing Level ...... 45 6.3.3. Constraints at Trading Level ...... 45 7. CLUSTER DEVELOPMENT POTENTIAL ...... 47 7.1. Overview ...... 47 7.2. Production Potential ...... 47 7.3. Processing/canning of cucumber ...... 47
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7.4. Improvement in Quality ...... 47 7.5. Saving in Post-Harvest Losses ...... 48 7.6. International Standards...... 48 8. PLAN, POLICIES AND STRATEGIES ...... 49 8.1. Plan ...... 49 8.2. Policies ...... 49 8.3. Strategies for Southern Punjab Cluster ...... 50 8.3.1. Production Level Strategies ...... 50 8.3.2. Value Addition Level Strategies ...... 50 8.3.3. Marketing and Trading/Export Strategies ...... 51 8.4. Strategy for Balochistan Cluster ...... 51 8.4.1. Production Level Strategies ...... 52 8.4.2. Value Addition Level Strategies ...... 53 8.4.3. Marketing and Trading Level Strategies ...... 53 9. BENEFITS AND COSTS OF CLUSTERING ...... 54 9.1. Investments, Costs and Returns in Punjab and Balochistan ...... 54 9.2. Summary of Investment Costs ...... 55 9.3. Economic, Social and Environmental Returns ...... 56 9.4. Conclusion...... 58 10. PROGRAMS AND PLANS ...... 59 10.1. Organization and Networking of Stakeholders ...... 59 10.2. Program for Research Reform ...... 60 11. ANNEXURES ...... 62 Annexure 1: Macro Data Sources and Literature Reviewed ...... 62 Annexure-2: List of Stakeholders Consulted...... 63 Annexure-3: Feasibility Study for Cucumber pack house ...... 64
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LIST OF TABLES
Table 1: Area production and yield of cucumber by province during 2015-16 ...... 18 Table 2: Province wise area (000 ha) production (000 tonne) of Cucumber 2008-2016 ...... 19 Table 3: Comparison of world vs. Pakistani Cucumber sector, 2016 ...... 19 Table 4: Trend in the world cucumber production and export during 2008-17 ...... 20 Table 5: Top Cucumber Producing Countries of the World (2016) ...... 21 Table 6: Top Ten Cucumber Exporting Countries of the World (2016) ...... 21 Table 7: Top Cucumber Importing Countries of the World (2016) ...... 21 Table 8: Cucumber production areas by cluster, 2016-17 ...... 27 Table 9: Characteristic and Comparison of Cucumber Clusters ...... 28 Table 10: SWOT Analysis of Cucumber Southern Punjab Cluster (C-1) ...... 35 Table 11: SWOT Analysis of Balochistan Cucumber Cluster (C-2) ...... 39 Table 12: Gaps and constraints at production level ...... 44 Table 13: Gaps and Constraints at post-harvest and processing level ...... 45 Table 14: Gaps and Constraints at Trading Level ...... 46 Table 15: Inputs and infrastructure needs for development of South Punjab cluster ...... 54 Table 16: Inputs and infrastructure needs for development of Balochistan cluster ...... 55 Table 17: Summary of Investment costs ...... 56 Table 18: Economic Returns and Investments in Southern Punjab ...... 57 Table 19: Economic Returns and Investments in Balochistan ...... 57 Table 20: Program for Organization and Networking of Stakeholders ...... 59 Table 21: Program for Research Reform ...... 60
LIST OF FIGURES
Figure 1: Different stages of the cucumber ...... 17 Figure 2: Map of Pakistan Showing Cucumber Production ...... 28 Figure 3: Value chain of Cucumber ...... 34
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LIST OF ACRONYMS
AARI Ayub Agricultural Research Institute
ADP Annual Development Plan
AMRI Agricultural Mechanization Research Institute
AOs Agriculture Officers
ARI Agriculture Research Institute
CPEC China Pakistan Economic Corridor
DAP Di-ammonium Phosphate
DFM Directorate of Farm Mechanization
DPH&FT Directorate of Post-Harvest & Food Technology
FAO Food and Agriculture Organization
FAOSTAT Food and Agriculture Organization of the United Nation Statistics
FAs Field Assistants
FEG Farmer Enterprise Group
FS&TRP Food Science & Technology Research Program
FSC&RD Federal Seed Certification and Registration Department
GAP Good Agriculture Practices
GI Geographical Identification
GoP Government of Pakistan
Ha Hectare
IPPC International Plant Protection Convention
IQF Individually Quick Frozen
IRR Internal Rate of Return
ISO International Standard Organization
ISPMs International Standards for Phytosanitary Measures
Kg Kilogram
KP Khyber Pakhtunkhwa
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MNFS&R Ministry of National Food Security and Research
NARC National Agricultural Research Centre
NGOs Non-Governmental Organizations
NPK Nitrogen, Phosphorus, Potassium
NYUT National Yield Uniformity Trial
PARC Pakistan Agricultural Research Council
PFVA All Pakistan Association of Fruits & Vegetables Exporters, Importers & Merchants
PHRC Post Harvest Research Centre
PKR Pakistani Rupee
R&D Research & Development
SOP Sulphate of Potash
SWOT Strengths, Weaknesses, Opportunities, Threats
UAE United Arab Emirates
UAF University of Agriculture, Faisalabad
UK United Kingdom
USA United States of America
US$ United States Dollar
VRI Vegetable Research Institute
VRP Vegetable Research Program
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EXECUTIVE SUMMARY
Global cucumber is cultivated on 2.27 million ha and producing around 83.7 million tonnes of cucumber with an average per ha yield of 37 tonnes. Pakistan ranks 50th among the world’s cucumber producing countries, cultivating the crop on 4.6 thousand ha and producing 61 thousand tonnes of cucumber with an average yield of 13.2 tonnes. China is the global leader in cucumber production. Worldwide, 15% of cucumber production is exported, valued at US$ 2.5 billion. Overall, the value of cucumber exports rose at the rate of 2.0% per annum during 2008-16. Spain is the top exporter followed by Mexico. According to the last available statistics, cucumber was cultivated on an area of 4.6 thousand ha with a total production of 60.6 thousand tonnes by an average yield of 13.2 ton per ha in Pakistan. Presently, Pakistan lags far behind the global average in per ha yields, quality, price and exports. However, the country has great potential to hold on all these fronts because of many advantages including proximity with China and Gulf countries, the seasonal difference with the main producers and favorable production cost especially low labor cost.
Pakistan is an importer of cucumber equivalent to 20% of its production and the yield of cucumber in the country is only 36% of the world average yield. Although growth rate in cucumber production is higher than the population growth in the country as well as growth in the global production but to make the Pakistani cucumber competitive in national and international markets lot more needs to be done. Because of the wide variation in socio-economic and geographical situation in which cucumber is grown, a cluster approach has been adopted to evaluate the gaps along various segments of the value chain and to identify the viable interventions in various regionally contiguous regions or clusters.
Cucumber in Pakistan is grown in all provinces of the country but major production is concentrated in Punjab followed by Balochistan and Khyber Pakhtunkhwa. Two clusters, one in Southern Punjab with Pakpattan as its centre point and the other in Eastern Balochistan with Khuzdar as its centre point are identified based on the concentration of area under the crop and supply of fresh produce. Wide variation in yield exists in per ha yield across the clusters.
In this study several performance gaps were identified at the production, processing and trading components of the value chain, specifically with the technology, transportation and value chain development. These included the lack of improved commercial cucumber cultivars, management practices to produce high quality marketable fruit, absence of packaging and proper transport for trading in the high-value fresh cucumber market and lack of processing. Currently, Pakistan is not a regular cucumber exporter in large quantities.
In order to address multilevel challenges from production to product and market development, performance targets were set based on global average for yield, quality and export and the interventions were designed to meet these targets over the period of five years. Keeping in view the gaps and constraints, specific interventions have been proposed for all clusters. These interventions include introducing high-yielding cucumber varieties/hybrids for open field and for protected cucumber production, introducing improved management practices especially protected cultivation, promote the establishment of certified nurseries and improvement in value chain for export through encouraging the establishment of pack houses in Punjab clusters and capacity building of stakeholders in both the clusters. The indirect interventions include strengthening of
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cucumber research and capacity building of producers through demonstrations. These interventions are to be initiated by government and executed in participation with the private sector including the farmers, traders and their groups/associations. A time-horizon of five years is set for determining the outcomes of the cluster development interventions.
As part of this study, several performance gaps are identified in cucumber production. These included the lack of improved cultivars, primitive production technology, high pest pressure and low quality of the produce. The specific performance targets were set for both the clusters and strategies were designed to achieve these targets. Specific interventions were suggested to achieve these targets which include area to be brought under insect net, improvement in management practices and improvement in the value chain by setting pack houses in each cluster. These interventions are to be initiated by government and executed in collaboration with participation of private sector including the farmers, traders and their groups/associations. A time- horizon of five years has been set for realizing the intended outcomes of the cluster development interventions.
The total estimated investment of this cluster development/up gradation plan is US$0.93 million for both the clusters. Out of this (53%) borne by the government in terms of strengthening the value chain research on cucumber, capacity building of stakeholders, subsidy on pack houses and interest free loans for the value chain infrastructure. Accounting for all the yearly value chain costs including the production, value addition and marketing costs applied over five years, the estimated Internal Rate of Return (IRR) for both the clusters is 29%; for Southern Punjab 25% and for Balochistan it is 72%. The pooled Net Present Value (NPV) for both the clusters is positive at US$0.3164 million. These IRRs are based on respective investment costs in each cluster centre point and the present value of resulting revenues over a period of five years. This indicates that cluster development interventions are likely to generate positively return on the investment made and would add additional value can be seen in the Summary Sheet given below.
These interventions would result in far reaching economic and social impacts, including increased productivity and production, higher quality of cucumber, increased income to farmers and other stakeholders and employment in rural areas thus benefiting all the stakeholders of cucumber clusters in Punjab and Balochistan. The interventions are expected to create new jobs.
However, these benefits will be achieved only if the cucumber related research is strengthened and capacity of stakeholders’ is strengthened to produce and manage the quality cucumber.
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Summary Sheet of Cucumber Cluster
Southern Punjab Baluchistan Overall Information (Pakpattan) (Khuzdar) Area of the cluster (ha) 1265 621 1886 Production of the cluster (tonnes) 34757 4555 39312 Current yield of the cluster (tonne/ha) 27.5 7.3 20.8 Area of cluster focal point (ha) 174 284 458 Production of the focal point (tonnes) 8,346 2,074 10,420 Added production- improved practices (tonnes) 5754 1824 7578 Added value - improved practices (US$) 980306 310050 1290355 Saved production – reduce PH losses (tonnes) 2206 319 2525 Added value - reduced PH losses (US$) 375784 54259 430043 Added value– improved VC operation (US$) 281,605 6,703 288,308 Added value – all interventions in the 5th(US$) 1,356,089 364,309 1,720,398 Added production cost- Input & harvest (US$) 747,507 184,431 931,937 Added VC cost (washing, grading, etc.): (US$) 328,300 140,362 468,662 Added transportation, marketing, storage cost:(US$) 11,348 1,676 13,024 No of pack house required 3 0 3 Investments required on R&D interventions (US$) 300,000 50,000 350,000 Promotion of protected cultivation (US$) 15,000 15,000 30,000 Investments on value addition-pack house (US$) 411,600 - 411,600 Government loan on private investment (US$) 45,276 - 45,276 Investment on certified nurseries (US$) 20,000 5,000 25,000 Stakeholders training (US$) 50,000 20,000 70,000 Total investment required over five year (US$) 841,876 90,000 931,876 Public sector investment (US$) 444,596 58,000 502,596 Private sector investment (US$) 397,280 32,000 429,280 Production level investments 385000 90,000 475,000 Value chain level investments and processing 456876 0 456,876 Overall benefits (US$) and rate of return Total production increase in 5th year (tonnes) 7,960 2,143 10,103 Gross revenue (undiscounted) in 5th year 1,637,694 371,011 2,008,706 Additional operation costs in 5th year 1,087,155 -326,468 760,687 Net cash flow (undiscounted) in 5th year 550,540 44,543 595,083 NPV (US$) 240234.2 44542.96 316403 Internal Rate of Return 25% 72% 29%
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1. INTRODUCTION
1.1 Cucumber as a fruit vegetable
Cucumber (Cucumis sativus) is one of the most popular salad vegetables in Pakistan. Cucumber is susceptible to moisture loss and decay but bruising and compression injury are very common when careful harvest and handling practices are not followed. Cucumber has a light to dark green color, thin skin, moisture-rich flesh with tiny seeds inside, and is enjoyed best in salads, sandwiches, or as a juice. It has high water content that helps remain the human body hydrated and the low-calorie content makes it a great choice for a weight loss diet.
The cucumber fruit grows rapidly to harvest and picking the fruit as soon as they reach marketable size maintains the vitality and productive capacity of the plant. The fruit is harvested at a range of developmental stages, depending on the intended use. The time from planting until the beginning of the harvest generally ranges between 55 to 60 days, depending on the cultivars and growing conditions. Cucumber fruit is normally harvested at maturity; near full size but before the seeds are fully enlarged and become hard. The two main external indices of harvest maturity are fruit size and skin color. The main internal indices of harvest maturity are seed development, ocular jelly formation, and flesh texture. Fresh market slicing cucumbers should be at least 15 cm (6 inches) long and firm to the touch (Figure 1). Skin color is another widely used index for assessing fruit maturity. Fruit are generally at their highest eating quality when the skin is uniformly green. Fruit that are too mature have a tough leathery skin and are bitter in flavor. At proper harvest maturity, a jelly-like material will be formed in the seed cavity. Seed development is also used to determine harvest maturity. The seeds should be uniform white in color and immature (Figure 2).
Figure 1: Different stages of the cucumber
1.2 National Cucumber Production
In Pakistan, almost the entire production volume is marketed domestically. Currently, no production goes into processing. The total production of cucumber in Pakistan was 54.29 thousand tonnes; harvested from an area of 3.38 thousand ha with the average yield of 16
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tonne/ ha in 2016. If we compare the average yield with that obtained at experiment stations, the gap in yield is about 60%.Cucumber has high commercial value. Keeping in view its importance, farmers and traders are extremely careful in handling the product at every stage of the value chain. However, Pakistan is the developing country and like many other fruits and vegetables, losses in cucumber are in the range of 35-40%.
Punjab is the leading cucumber producing province of Pakistan as it occupies 52.5% of cucumber area and has share of 82.8% of production in the country during 2016 (Table 1). Per ha yield is also highest in Punjab at 25.3 tons per ha while 7.3 tonnes in Balochistan.
Table 1: Area production and yield of cucumber by province during 2015-16 S#. Province Production Production Area (ha) Area Yield (tonnes) Share (%) share (%) (tonne/ha) 1 Punjab 44919 82.8 1772 52.5 25.3 2 Balochistan 6777 12.5 925 27.3 7.32 3 Sindh 2592 4.7 684 20.2 3.79 4 Pakistan 54288 100 3381 100 16.0
Source: MNFS&R (2016)
Area under cucumber in Pakistan has increased from 2.65 thousand ha in 2008 to 3.38 ha in 2016 with an annual growth rate of 3.3%. Similarly, production has also increased from 37.4 thousand tonnes to 54.3 thousand tonnes during the corresponding years producing an average annual growth of 5.2%. This implies that yield in cucumber also increased at a rate of 1.9% per annum. The increase yield and production are highest in Punjab while acreage increase was highest in Balochistan (Table 2).The yield growth is positive in Punjab and Balochistan.
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Table 2: Province wise area (000 ha) production (000 ton) of Cucumber 2008-2016
Year Punjab Sindh Balochistan Pakistan
Area Prod Yield Area Prod Yield Area Prod Yield Area Prod Yield 2008-09 1.392 29.901 21.48 0.516 2.086 4.04 0.741 5.415 7.31 2.649 37.402 14.1 2009-10 1.477 32.044 21.7 0.711 2.699 3.8 0.795 5.808 7.31 2.983 40.551 13.6 2010-11 1.581 35.183 22.25 0.696 2.683 3.85 0.882 5.847 6.63 3.159 43.713 13.8 2011-12 1.742 38.952 22.36 0.715 2.749 3.84 0.94 6.834 7.27 3.397 48.535 14.3 2012-13 1.795 40.439 22.53 0.61 2.325 3.81 1.094 7.183 6.57 3.499 49.947 14.3 2013-14 1.767 39.436 22.32 0.616 2.383 3.87 1.145 8.345 7.29 3.528 50.164 14.2 2014-15 1.805 43.298 23.99 0.682 2.596 3.81 0.939 6.872 7.32 3.426 52.776 15.4 2015-16 1.772 44.919 25.35 0.684 2.592 3.79 0.925 6.777 7.33 3.381 54.288 16.1 Annual 3.6 5.6 2.0 1.5 1 -0.5 4 4.2 0.2 3.3 5.2 1.9 growth (%) Source: MNFS&R (2016)
The import of cucumber in Pakistan has increased exponentially from just 2 tonne valued at US$ 01 thousand in 2010 to 11.1 thousand tonnes valued at US$ 2.3 million in 2016. During the period, the import has escalated to 20% of the domestic production. 1.3 Global Context
On the global scale, the production of fresh cucumbers is estimated at 83.7 million tonnes during 2017. However, more than a quarter of production is grown for the processing industry which makes cucumbers the world’s leading vegetable for processing.
Pakistan perform very low in terms of per ha yield, export-production ratio and export price in the international cucumber sector. Its yield is only 36% of the world average yield. It contributes 0.07% of the world production however, its farm gate price is lower than the world average suggesting a great potential for world export on one hand, but great challenges to improve its value chain. The world exports are 2.65 million tonnes which is about 15% of its production and earns US$ 2.3 billion from cucumber while Pakistan export in cucumber is nil (Table 3).
Table 3: Comparison of world vs. Pakistani Cucumber sector, 2016
Parameter World Pakistan Share (%) Area (000 ha) 2271 4.6 0.20 Production (000) tonne 83754 60.6 0.07 Yield (tonnes/ ha) 36.88 13.2 35.84 Value of production (million US$) 40228 22.1 0.05 Farm gate price (US$/tonne) 480 365 75.91
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Quantity of international trade (000 2652 0.0 0.00 tonnes) Value of international trade (million US$) 2305 0.008 0.00 Export quantity as % of production 15% 0% - Export value as % of production value 6% 0% - Average export prices (US$ /tonne) 869 800 92.04 Source: FAOSTAT, Production, Crops, Trade
Internationally the cucumber production has increased at an annual rate of 4.2% per annum during 2008-16, which is much higher than the population growth implying that per capita consumption of cucumber is increasing globally. The increase in production is contributed both by the expansion in cucumber area as well as its yield although contribution of yield improvement is much higher. Cucumber export and its value are increasing at the rate of 2.0% and 2.1% per annum, which is lower than the increase in production (Table 4).
Table 4: Trend in the world cucumber production and export during 2008-17 World Cucumber Production World Cucumber Export
Year Area Production Yield Quantities Values (000 ha) (000 tonne) (tonne/ha) (000 tonne) million US$
2008 1921 58423 30.4 2425 2125 2009 1967 60639 30.8 2096 1801 2010 2021 62514 30.9 2321 2050 2011 2091 67891 32.5 2429 2029 2012 2116 70783 33.5 2328 2141 2013 2111 73220 34.7 2432 2384 2014 2141 76120 35.6 2588 2306 2015 2175 78701 36.2 2602 2135 2016 2219 80527 36.3 2652 2305 2017 2271 83754 36.9 NA NA Annual 1.7 4.2 2.6 2.0 2.1 growth (%) Source: FAOSTAT, Production, Crops
Worldwide cucumber is planted on an estimated area of 2271 thousand ha with production of 83.7 million tonnes during 2017. This translates into an average yield of 36.88 tonnes/ha. More than 40 countries are involved in its production. Volume of global gross exports reached at 2.6 million tonnes valued at US$2.3 billion (Table 4) and Pakistan has a negligible share of 0.001% and 0.003%, respectively. Cucumber trade of Pakistan is only 10 tonnes.
China is the top cucumber producing country in the world in terms of cucumber area and production followed by Russia, Turkey and Iran. Pakistan ranks at 50thwith respect to cucumber production in the world (Table 5).
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Table 5: Top Cucumber Producing Countries of the World (2016) Rank Country Production Area Yield 000(tonnes) 000(ha) (tonne/ha) 1 China 61,949 1155.8 53.6 2 Russia 1,992 68.7 29.0 3 Turkey 1,811 37.5 48.2 4 Iran 1,707 59.4 28.7 5 Ukraine 948 49.8 19.0 6 Uzbekistan 933 19.6 47.4 7 Mexico 886 18.6 47.6 8 United States 802 48.0 16.7 9 Spain 770 8.5 90.6 50 Pakistan 54 3.4 15.0 Source: FAOSTAT, Production, Crops
Mexico is the largest exporting country from Europe followed by Spain in terms of quantity of cucumber export while opposite in terms of the value of cucumber export earnings (Table 6). Currently Pakistan is not a regular exporter of cucumber. However, Pakistan may increase cucumber export by catering the potential market and other markets efficiently after applying phytosanitary standards of the world, improving value chain, and adopting Good Agricultural Practices (GAP).
Table 6: Major Cucumber Exporting Countries of the World (2016) Rank Country Quantity (000 Country Value (Million US$) tonnes) 1 Mexico 694 Spain 61 2 Spain 633 Mexico 48 3 Netherlands 351 Netherlands 42 4 Canada 145 Canada 20 5 China 73 Belgium 7 6 Belgium 69 Iran 6 7 Belarus 61 USA 6
Source: FAOSTAT, Trade, Crops and Livestock Products
USA is the top importer of cucumber followed by Germany and United Kingdom (Table 7). Pakistan is net importer of cucumber and ranks at 14th position in term of value of cucumber import in the world market with an import of 11.1 thousand tonnes which is about 20% of its domestic production valued at US$ 2.8 million during 2016.
Table 7: Top Cucumber Importing Countries of the World (2016) Rank Country Quantity Country Value (Million (000tonnes) US$) 1 USA 873 USA 745 2 Germany 466 Germany 531
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3 United Kingdom 156 United Kingdom 178 4 Russian Federation 116 Russian Federation 125 5 Netherlands 99 Netherlands 106 6 Belgium 98 France 83 7 France 78 Belgium 79 8 Czechia 75 Canada 64 Source: FAOSTAT, Trade, Crops and Livestock Products
In summary, although cucumber production in Pakistan is growing at a reasonable rate, suggesting increasing per capita cucumber availability in the country. But it has to go a long way to become a competitive partner in the national and international cucumber market. The yield of cucumber is only 36% of the world average yield and it is a net importer of cucumber importing worth of US$ 2.28 million, which is about 20% of its production. To transform Pakistan’s cucumber and make it an international competitive partner in cucumber market, it has to reform its production, value chain and trade strategies. Because of the wide variation in the cultivation of cucumber in various regions of Pakistan, this study has adopted the cluster approach to analyze the whole value chain of the commodity in its main regional contiguous growing regions and identify viable intervention for this transformation.
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2. OBJECTIVES
The overall goal of this study is to analyze the whole value chain of cucumber at cluster level and contribute to the Cluster Development Based Agriculture Transformation Plan -V2025. Specific objectives of the study are:
1. To identify the major clusters of cucumber production in Pakistan 2. To characterize and conduct SWOT analysis of each cucumber cluster 3. To identify technological, institutional, infrastructure and policy gaps in each cluster 4. Assess the potential of cucumber production in each cluster 5. Suggest technological, institutional, infrastructure and policy interventions to achieve the cluster potential 6. Conduct economic and social feasibility of the suggested interventions.
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3. METHODOLOGY
The data and information related to the characteristics, gaps, potential and needed interventions to meet the gaps in cucumber clusters were collected from three sources:
I. Macro-Data. Relevant macro data were collected from various published and unpublished reports of government and non-governmental organizations and internet search on cucumber value chain (Annexure 1). II. Stakeholders Consultations. Primary information was collected through meetings, consultations, key informant interviews, surveys and focus group discussions using structured tools and open-end questionnaires (Annexure 2). III. Literature Review. The literature related to the functioning, gaps, and interventions in cucumber value chain is reviewed and synthesized (Annexure 1).
Following generic parameters and indicators are used in collecting the data: Global context of cucumber sector; Production potential and review of cucumber sector; Cost of production, harvesting, post-harvest processing of cucumber from the growers; Marketing, traders, wholesalers, retailers, and processors; Issues and constraints relating to production, harvesting, selling, marketing, trading; Recommendations and benchmarks based on global parameters;
The author then used these data to first identify the cucumber cluster in the country and then in consultation with stakeholders prescribes the characteristics of each cluster, identified the cluster strengths, weaknesses, opportunities & threats (SWOT), investigated the functioning of existing value chain, and quantified the cluster potentials. Based on the above analysis, the author derived the interventions for improvement in each cluster. The cost and benefits of each intervention are also estimated to finally work out the Internal Rate of Return of the whole package. Cucumber Transformation Plan is also formulated which identifies sustainable cluster upgrading strategies for the development of the cucumber sector that can help create significant economic opportunities for producers, processors and all the stakeholders participating at different points of the value chain.
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4. LITERATURE REVIEW
According to All Pakistan Fruits and Vegetables Association, R&D is a vital element to strengthen the vegetables exports of Pakistan. The R&D should focus on exploration of new varieties, enhancement of shelf-life and disease control in the existing products.
Ibrahim & Omotesho (2013) explained that vegetables are considered as an essential part of agriculture because these are a source of livelihood and foreign exchange. These are useful for health, maintenance of nutrition level and resistance against diseases.
The production of off-season plants was helpful for the reduction at high prices at the beginning and end of the vegetable season. Temperature and humidity were under the control of farmers in off season or in tunnels (SMEDA, 2016). Extension in the season and yield of a particular vegetable is observed in case of off-season cultivation (Iqbal et al., 2009).
Alboghdady & Shata (2014) explored the technical efficiency in the production of cucumber under greenhouses, plastic tunnels and open field system. Results confirmed the difference in efficiency among various cultivation systems. They pointed out toward the improvement of efficiency and productivity. Education, extension services and agricultural knowledge were found beneficial for the improvement of efficiency.
As per statistics, 52766 tonnes cucumber was produced from an area of 3426 has during 2014-15 with an average yield of 15.4 t ha-1 in Pakistan. In Punjab 43298 tonnes cucumber was produced from an area of 1805 has during the same year. Punjab shares about 52.68% in area and 82% in production of cucumber (Fruit, Vegetable and Condiments Statistics of Pakistan 2015-16).
The current regional economic intensification and changes in food habits have made both the production and consumption of fruits and vegetables increasingly important. The fruit and vegetable sector plays a key role in improving agricultural incomes, poverty reduction, food security and sustainable agriculture. However, this sector suffers greatly from post-harvest losses. Some estimates indicate that about 30-40% of the fruit and vegetables are lost or released after leaving the farm gate. Massive losses after the harvest lead to yield losses for the producers. International markets reject fruit and vegetables that contain illegal pesticides, pesticide residues that are beyond acceptable limits, and are poorly labeled and packaged (FAO, 2006).
Use of poor quality ground water significantly lowers the production and quality of the cucumber in some areas. Major cost components of cucumber production, i.e., labor used for different management practices, land preparation; seed and fertilizer are significantly related with productivity level of the crop. Balochistan is a water scarce province and water shortage is main problem for farmers in the province (UN&PO).
In cucumber, the price difference ranges around PKR 40/kg in seasonal months from April to July while it rises to an average price of PKR 60/kg in August to March (stakeholder’s discussion, 2018).
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In Pakistan, very limited quantity of fruits and vegetables is preserved leading to heavy post-harvest losses. Farmer gets direct benefit of food processing industry as they get higher price for his produce (stakeholder’s discussion, 2018).
Traditionally, before refrigerated shipping and various moisture-sealing methods became common, cucumbers were pickled shortly after picking as the preservation method of choice. For this, the thin skin is ideal; because it lets the pickling juices pass into the cucumber without all that fussy slicing. With a big enough jar, one can have a relatively simple time pickling a bunch of whole cucumbers. The advantage of plastic-wrapping cucumbers over waxing is that you don’t have to deal with the wax. Generally, people would peel waxed cucumbers, and that would certainly affect the presentation and nutritional properties of the cucumber. Cucumbers have a relatively thin skin, so when kept out for any period of time, are likely to lose moisture and dry out quickly if nothing is done to prevent it. Often cucumbers are waxed as one method to seal the moisture (Geiger, B. 2011).
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5. CLUSTER IDENTIFICATION AND CHARACTERIZATION
5.1. Identification of Clusters
In this study following two clusters have been identified:
The Southern Punjab Cluster (C1). This cluster consists of ten districts of Southern Punjab (Table 8 and figure 1) with Pakpattan as its focal point. The cluster covers 67% of the total cucumber area in Punjab and supply 70% of production in the province. The cluster focal point, Pakpattan has highest share in cucumber production in the province.
The Eastern Balochistan Cluster (C2). The cluster includes 5 districts all contributing about 67% of cucumber produced in the Province. Khuzdar has been taken as cluster focal point for Balochistan cluster (Table 8).
Table 8: Cucumber production areas by cluster, 2016-17 % Share in Production Share(% of Yield District Area (ha) cluster area (tonnes) production (tonne/ha) Southern Punjab Cluster (C1)
Multan 279 22.06 4481 12.89 16.06 R.Y. Khan 243 19.21 4930 14.18 20.29 Vehari 186 14.70 2507 7.21 13.48 Pakpattan 174 13.75 8346 24.01 47.97 Bahawalpur 93 7.35 2039 5.87 21.92 Okara 85 6.72 3606 10.37 42.42 Lodhran 61 4.82 3120 8.98 51.15 Sahiwal 52 4.11 2480 7.14 47.69 Khanewal 51 4.03 988 2.84 19.37 Bahawalnaga 41 3.24 2260 6.50 55.12 r Total cluster 1265 100.0 34757 100.0 27.48 Total Punjab 1895 66.74 49588 70.09 26.16 Balochistan Cluster (C2) Khuzdar 284 31 2074 31 7.3 Killa Saifullah 105 11 750 11 7.1 Kalat 86 9 662 10 7.7 Nasirabad 80 9 598 9 7.5 Loralai 66 7 471 7 7.1 Cluster Total 621 67 4555 67 7.3 Balochistan 925 - 6784 - 7.3
Source: MNFS&R (2016)
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Figure 2: Map of Pakistan Showing Cucumber Production
5.2. Comparison of Cluster Characteristics
The Southern Punjab clusters have fertile lands with abundant resources and plenty of water, while Eastern Balochistan cluster is a desert oasis. The main focus of the Punjab and Baluchistan Clusters is to produce disease free, quality table cucumber. The cluster of Southern Punjab and Eastern Balochistan supply cucumber to the urban centers of Sindh and Punjab for trade. Table 9 presents an overall comparison of key characteristics in all three these clusters:
Table 9: Characteristic and Comparison of Cucumber Clusters
Salient Features Southern Punjab Cluster (C1) Balochistan Cluster (C2) Products Fresh cucumber Fresh cucumber Districts Pakpattan, Multan, Lodhran, Khuzdar, Killa Saifullah Okara, Khanewal, Vehari Kalat, Nasirabad, Loralai Bahawalpur, Rahim Yar Khan, Bahawalnagar Focal point Pakpattan Khuzdar district/Tehsil/Mouza Area of the cluster: (ha) 1265 621 Production: (tonnes) 34757 4555 Average yield: (tonne/ha) 27.48 7.33
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Salient Features Southern Punjab Cluster (C1) Balochistan Cluster (C2) Products Fresh cucumber Fresh cucumber Percentage of the crop area that lies in the cluster (Cucumber area of the 37% 18% cluster/Cucumber area in the country) % age Geographical and Sandy loam to clay Loam/silt texture Environmental Factors Medium altitude with mostly flat Combination of and plain areas mountainous and plain areas Hot in summer and cold in winter Mild cool climate during summer and cool in winter Average rain fall in the cluster is Average rain fall in the 100-300 mm cluster is 150-400 mm Heavy rain in monsoon is affecting Climate is dry, no effect of the production rain fall on production Flood irrigation is normal practice Irrigation from traditional from tube well and canal source. Karez and tube well sources About 20% crop receive irrigation No drip irrigation system through drips Cucumber Growers Small to large size landholding Small and medium size ranging from 1 to 80 acres landholding ranging from 5 to 20 acres No formal Cucumber Growers No formal Cucumber Associations Growers Associations Availability of abundant labor for Scarcity of labor cucumber production Large number of farmers in this Majority of farmers in this region are trained and follow the region are not well aware guidelines provided by seed & about modern practices, pesticide marketing companies Private seed or pesticide marketing companies are very few Gender Involvement Cultural practices usually involve No involvement of gender family or hired labor Product Features Both smooth and rough cukes 6-8 Smooth cukes 6-8 inches inches long long Demand remains high throughout Demand remain high the year throughout the year Lush green Lush green Variety Feature Nobel F-1, 14-270, Savier, Yallah, Nobel F-1, Savier, Yallah, Chever, 2833 and Mehran, 9786, Chever and Mehran, 9786, Saad, Syngenta, Taha, Jamil, Saad and Syngenta Nabil, Luna and Dala
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Salient Features Southern Punjab Cluster (C1) Balochistan Cluster (C2) Products Fresh cucumber Fresh cucumber Exotic (Green, light green color) Exotic and desi cucumbers and desi cucumbers are grown are grown Planting Planted in rows with 12 inches Planted in rows with 12 plant to plant distance and row to inches plant to plant row 30 to 48 inches distance and row to row 36 to 48 inches Direct seeding is usual practice/ Direct seeding is usual seedlings grown and transplanted practice/ seedlings grown on beds and transplanted on beds Tunnels About 75% crop is grown in plastic About 10 % crop is grown in tunnel. Mostly low to medium plastic tunnel. Mostly low height tunnels are in practice. height tunnels are in Protective farming is becoming practice popular
Input/Management Practices Fertilizer application: SSP, CaNH3, Fertilizer application: Urea, MOP, Urea DAP, SOP 50% of the farmers are using Majority of the farmers apply imbalance/inadequate inputs under dose of fertilizer and without soil analysis other inputs without soil analysis Normal practice is broad cast i.e. Normal practice is broad higher doses than required cast i.e. higher doses than required Weeding/Pruning/ Harvesting Plastic mulch and weedicides are Normally weedicides are usually practice to control weeds. used to control weeds. Pruning of extra stems to get Pruning is done to get maximum size of cucumber maximum size of cucumber Harvesting depends upon the time Harvested in July to October of sowing either in open field or in tunnels. Normally 2 to 3 crops are harvested in a year Pre-harvest losses are 5-10% and Pre-harvest losses are 5- post-harvest losses are 10% to 10% and post-harvest 20% losses are 10% to 20% Packaging/ Transportation Packed generally in Polyethylene Packed generally in bags without grading and Polyethylene bags without transportation in polyethylene & grading and transportation netted bags in polyethylene & netted bags Waxing facilities are not available Waxing facilities are not available Watering is normal practice to keep Watering is normal practice cucumber fresh to keep cucumber fresh
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Salient Features Southern Punjab Cluster (C1) Balochistan Cluster (C2) Products Fresh cucumber Fresh cucumber Diseases Powdery mildew, downy mildew, Powdery mildew, downy cucumber mosaic virus mildew, cucumber mosaic virus Pesticides and insecticides Many applications of Insecticides Application of Insecticides and fungicides are required during and fungicides is in practice the crop cycle No effective inputs monitoring No effective inputs system to check quality of seeds, monitoring system to check pesticides & fertilizers available in quality of seeds, pesticides the market. & fertilizers available in the market. Wholesaler/Retailer Farmers sell their product in whole Farmers sell their product in sale market through dealers. Some whole sale market. There is of the farmers have pre-harvest no pre-harvest contract contracts also The auction in the wholesale The auction in the market is generally based on the wholesale market is variety and weight, but exact generally based on the grading is done by retailers. variety and weight, but exact grading is done by retailers. The average market retail price of The average market retail cucumber is Rs.30 to Rs.60/kg price of cucumber is Rs.30 to Rs.50/kg Prices remain high at the Prices remain high at the commencement of the season, commencement of the decline gradually as supply season, decline gradually as increases. supply increases. Sold as fresh in local and national Sold as fresh in local and markets national markets Marketing through conventional Marketing through methods conventional methods Export Lack of facilities to export the Lack of facilities to export product the product New Technologies/ Drip and plastic tunnels are Drip and plastic tunnels are Infrastructure becoming popular not affordable by the farmers Packing and cold storage facilities Packing and cold storage are not available facilities are not available Value Addition No value addition/ processing No value addition/ processing No pickle formation/ value addition No pickle formation/ value for local utilization or export addition for local utilization purpose or export purpose
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Salient Features Southern Punjab Cluster (C1) Balochistan Cluster (C2) Products Fresh cucumber Fresh cucumber Supply Chain The chain is fragmented and less The chain is fragmented integrated; and less integrated; price spread is uneven price spread is uneven Govt. facilitation not available to Govt. facilitation not find new markets and export available to find new facilities markets and export facilities Certification No certification or quality control No certification or quality mechanism control mechanism for fresh produce. Cost of production Open field cultivation cost is Open field cultivation cost is around Rs.10/kg of produce around Rs.10/kg of produce whereas it is much higher in case whereas it is much higher in of tunnels case of tunnels The average cost/ ha ranges The average cost/ ha between Rs.285,000-400,000 ranges between Rs.140,000-200,000 Financial Benefit A typical open field producer earns A typical open field producer about Rs.10-15/kg of cucumber earns about Rs.17/kg of depending upon quality and cucumber depending upon season, whereas from tunnel quality and season, production the profitability is much whereas from tunnel higher. The profitability depends production the profitability is upon the harvesting time much higher Subsidies/Incentives/ Financial support from public sector Financial incentives are not Facilities is available for drip irrigation and available at govt. level tunnel farming Research and Development Agriculture/horticulture department Lack of departmental provides extension services in the /extension services province. There is no research institution working in the cluster. However, seed and pesticide marketing companies are providing technical support in growing cucumber Socioeconomic Networks The role of NRSP is important in The role of BRSP is improving cucumber cultivation in important in improving the cluster cucumber cultivation in the province
5.3. Description of value chain
Many national and international seed companies are involved in business of cucumber seed in this region. Most of the cucumber area is under imported varieties/ hybrids. Seed of local varieties of cucumber is also available on limited scale. Some farmers also produce their own seed. Sowing is done manually by the local labor. Farm input supplies like fertilizer and
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pesticides are available in local market from local traders and outlets of agricultural companies. Harvesting, packaging and loading on trucks are done manually by local labor. The fresh produce is transported to vegetable markets throughout the county depending upon demand, supply and market prices. Government agriculture research and development structure is more effective in Punjab as compared to other provinces. Agriculture extension setup is not much effective in both the clusters. Private seeds and pesticides companies are active in Punjab.
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Figure 3: Value chain of Cucumber
Activity Southern Punjab cluster Baluchistan cluster
Seed Producers, Seed Seed Producers, Seed Seed Companies/Importers & Sellers companies/Importers & Sellers
Farmers, Local labour & Inputs Farmers, Local labour & Inputs Seed Sowing and Cultural Practices Suppliers Suppliers
Harvesting, Washing and Packaging Farmers and Local Labour Farmers and Local Labour
Tansportation Local transporters Local transporters
Whole sellers of major vegetable Whole sellers of mainly Punjab Sale & Marketing markets and retailers market and retailers
Value Addition & Processing No value addition & processing No value addition & processing
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5.4. SWOT Analysis
5.4.1. Overview
The SWOT analysis was carried out in focus group discussions conducted in major cucumber producing areas with the consultation and participation of different stakeholders. The results are organized around the value chain functions including inputs, production, storage, marketing and trade. 5.4.2. SWOT Analysis of Southern Punjab
The cluster has many strengths and opportunities, including a natural comparative advantage with respect to agro-ecological conditions, and off-season production as compared with major competitors and proximity to China and Gulf countries. Major weaknesses are poor planning, policy, low priority/neglect, poor cold storage infrastructure and inadequate investment in research, technology development/breeding, extension, marketing, etc. Threats include diseases and natural disasters, such as, climate change, energy shortages for cold storage and processing, and non-transparent trading practices in local market systems. These factors generally hold back investment into the value chain, inhibiting its development. The following (Table 10) presents the SWOT analysis for the Punjab.
Table 10: SWOT Analysis of Cucumber Southern Punjab Cluster (C-1)
Parameters Strengths Weakness Opportunities Threat Environment/ Sandy loam to In upper parts of Starting from Severe rain fall in Climate Change clay texture, the region, frost south to North, moon soon temperate climate and precipitation fruit is ready for sometimes makes the region may affect harvest hamper the fruit ideal for flowering and successively. bearing capacity cultivating and bearing of the Fresh fruit is of cucumber growing different fruit available from vines and cause varieties of February to July erosion cucumber Input Supplies Reliable major Limited soil testing labs Use of fertilizer and availability of can play a major adulterated or pesticide supply certified, quality role in matching expired system with many and pure input use with the pesticides. National / variety/ hybrid soil nutrient Injudicious use Multinational seed conditions of chemicals Companies Poor seed providing these production, chemicals procurement and certification system Application of In appropriate Modern methods Extra/ under dose required fertilizers methods of of precision may hamper the can benefit the fertilizer agriculture/ liquid growth and affect farmer the production
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Parameters Strengths Weakness Opportunities Threat application application with increase the cost drip irrigation Organic fertilizer Low uptake and Local farmyard Un processed opportunities are usage of manure can be farm yard manure available in the fertilizers used after may cause soil region processing borne diseases Cluster Large number Little interaction Possibility of Lack of optimal interaction farmers grow among farmers learning from coordination and cucumber in this and researchers progressive integration of cluster farmers in the cucumber value cluster chain actors Creating high Producers have Possibility of value for the little information collective efforts growers, traders about the quality for achieving the and retailers requirements in economies of national and scale international markets Production Farmers having Traditional Potential for Impact of climate Management traditional skills in management horizontal and change, swings in practices cucumber practices are vertical weather production faulty (notably expansion conditions pruning, layout potential exist; and fertility Road management and infrastructure irrigation) improving Commercial and Certified, quality Govt./ Research Costly seeds exotic new and pure variety/ departments can increase the cost varieties/ hybrids hybrid seeds are establish mother of production can enhance the very costly nurseries to production to produce different optimum level. varieties/ hybrids at local level Irrigation water Flood irrigation Facilitation can Extensive water available at most not only waste be made wastage can of areas the water, also is available at cause scarcity a cause of weed subsidized rates /shortage of and disease of drip irrigation water in future transportation system to save cost of irrigation & water Improved Lack of Govt. institutions Lack of interest management knowledge about and other and non-serious practices can improved partners are behavior of cover the yield management available for scientists and gap of 5 tonne practices capacity building extension per ha of farmers workers
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Parameters Strengths Weakness Opportunities Threat Possibility of Unorganized and Local hybrids can Lack of budget, diversification into mixed plantation be established by scientists and improved in orchards research germplasm for varieties organization establishment of exotic varieties. Pre & post- Through Pre- and post- Training institutes Pre & post- harvest improved harvest losses at public and harvest losses handling practices of pre due to lack of private level can can cause heavy and post-harvest skills and play role for financial losses. handling optimum infrastructure capacity building yield potential (i.e., storage to minimize pre & can be achieved facilities); post-harvest i.e. up to 40 losses/wastages losses tonne/ha and can are nearly 10- minimize the 20% of total post-harvest production losses Transportation Good road No environment Advantage of infrastructure (temperature, exporting to connecting humidity, etc.) nearby countries cluster with all big control during cities transportation Improper staking during -- transportation High fuel cost especially diesel used in transportation Marketing Bulk produce in Unstable Financial peak season market prices support to Good quality No stable farmers in form produce marketing of quality based Prolonged policy / delivery availability of infrastructure contracts fresh produce No grading, Big opportunity proper to reform the packaging and old market transportation practices in the -- Auctioning in province the wholesale Emerging market with supermarkets visual and spot can introduce grading contract with farmers which may improve retailing quality, and reduce post-harvest
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Parameters Strengths Weakness Opportunities Threat losses and trading margin Certification of Certification Lack of Agencies for Un certified crops crop process may be knowledge and certification of and fruits cannot made easier by interest in crop and fruit are be fit for export new legislation certification available and good quality and involvement process due to and price at of private sector large no of domestic levels. formalities Phytosanitary Certification Lack of Certification Un certified and certification process results in knowledge and process may be diseased produce disease free interest in made easier by is vulnerable to production certification new legislation heavy losses and process due to and involvement phytosanitary large no of of private sector threats at cross formalities and border levels. non - friendly behavior and low cost Trade/Export Bulk surplus Little capacity Mechanized Unstable fresh produce of farmers and farming to electricity and during peak traders and no reduce cost of gas prices and season quality production supply for Some food infrastructure to Quality based industry companies produce, contract Slow involved in handle & farming development of processing of market the between quality carrot for quality product farmers and infrastructure, pickles to sale for export exporters Lack of in local and High cost of Quality seed stakeholders international production & production for interest in market can’t compete local demand to capacity in international reduce seed building to market import produce and No government maintain quality policy to product support the exporters and processors Processing Grading at farm Processing Machinery can be Processing of level, processing machinery not made available to cucumber (waxing, grading) available. Non- farmer potentially by and quality grading (rather associations for large packing may topping the good processing corporations may enhance the crop quality cucumber impact the value over poor quality) margins of small by the harvest processors contractor
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Parameters Strengths Weakness Opportunities Threat
Value addition Cucumber can Little capacity of Emerging be used in many farmers and supermarkets can value-added traders and little introduce contract products such as quality with farmers (Pickle, make up infrastructure to which may value products, pulp produce, handle, added products and juice) and market the quality value added products e-Marketing Direct marketing Lack of Registered & Conventional and time to say knowledge and certified produce system is a good bye to illiteracy, will be sold hurdle for best conventional Conventional directly & easily prices to farmers marketing auctioning in the without wastage and users wholesale market of time and with visual and involvement of spot grading extra stakeholders
5.4.3. SWOT Analysis of Balochistan
Balochistan is endowed with a natural comparative advantage with respect to agro-ecological conditions and access to large markets. Proximity to large urban markets, such as Karachi, Iran and the Middle East, large farm sizes, opportunities for investment in cold chains are key strengths. Threats and weakens are represented by political instability insecurity, climate change, water scarcity, and inadequate research and extension services. Despite these challenges, the cucumber value chain in the province is able to create substantial incomes for the actors associated with it.
Table 11: SWOT Analysis of Balochistan Cucumber Cluster (C-2)
Parameters Strengths Weakness Opportunities Threat Environmen Loam/silt texture, In upper parts of Starting from Severe t/ Climate slight cold and the region, frost south to North, drought Change temperate climate and snow may fruit is ready for hampers the makes the region affect flowering and harvest fruit bearing ideal for cultivating bearing of the fruit successively. capacity of and growing Fresh fruit is cucumber different varieties available from vines of cucumber July to October Input Growing demand Non-availability/ The private Commercial Supplies for input supplies application of sector can fill fertilizers and including fertilizers, appropriate quality the gap by pesticides may fungicides and fertilizer, pesticides providing input increase the pesticides and micronutrients supplies to the cost of growers or by production
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Parameters Strengths Weakness Opportunities Threat in local input use of organic market fertilizers and pesticides Application of In appropriate Modern Extra/ under required fertilizers methods of methods of dose fertilizer can benefit the fertilizer application precision may hamper farmer increase the cost agriculture/ the growth and liquid affect the application with production drip irrigation Organic fertilizer Low uptake and Local farmyard Un processed opportunities are usage of fertilizers manure can be farm yard available in the used after manure may region processing cause soil borne diseases Cluster Large number, Little interaction Possibility of interaction more than 5,000 among farmers and learning from farmers grow researchers progressive Lack of optimal cucumber in farmers in the coordination Balochistan cluster and integration Cucumber value Producers have Possibility of of cucumber chain is functional little information collective efforts value chain in the region, about the quality for achieving the actors creating high value requirements in economies of for the growers, national and scale traders and international retailers markets Production Farmers having Traditional Potential for Impacts of Managemen traditional skills in management horizontal and climate t practices cucumber practices are faulty vertical change, production (notably pruning, expansion swings in layout and fertility potential exist; weather management and Road conditions irrigation) infrastructure improving. Commercial and Certified, quality, Govt./ Research Costly seeds exotic new and pure variety departments increase the varieties/ hybrids /hybrid seeds are can establish cost of can enhance the very costly mother production production to nurseries to optimum level. produce different varieties/
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Parameters Strengths Weakness Opportunities Threat hybrids at local level
Shortage of water, Facilitation can Drought is underground water be made serious is very deep 800- available at problem for 1200 feet subsidized rates vegetable of drip irrigation production. system to save cost of irrigation and water Improved Lack of knowledge Govt. Lack of management about improved institutions and interest and practices can cover management other partners non-serious the yield gap of 5 practices are available for behavior of tonne per ha capacity scientists and building of extension farmers workers Possibility of Unorganized and Local hybrids Lack of diversification into mixed plantation in can be budget, improved varieties orchards established by scientists and research germplasm for organization establishment of exotic varieties. Pre & post - Through improved Pre- and post- Training Pre & post - harvest practices of pre harvest losses due institutes at harvest losses handling and post - harvest to lack of skills and public and can cause handling optimum infrastructure (i.e., private level can heavy financial yield potential can storage facilities); play role for losses. achieved i.e., up losses/wastages capacity to40 tonne/ha and are nearly 10-20% building to can minimize the of total production minimize pre & post - harvest post - harvest losses losses Transportati Motorways & Access roads to Availability of Large on Highways connects remote areas net container in distances may the region with all prone to blockages the market as hamper the major cities in the High fuel cost already being transportation country. especially diesel used in certain to northern used in other fruits region of the transportation; high country freight costs Marketing Bulk produce in Unstable market Financial -- peak season prices support to
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Parameters Strengths Weakness Opportunities Threat Good quality No stable farmers about produce marketing policy / quality based Prolonged infrastructure delivery availability of No grading, contracts fresh produce proper packaging Big and opportunity to transportation reform the old Auctioning in the market wholesale market practices in with visual and the province spot grading Emerging supermarkets can introduce contract with farmers which may improve retailing quality, and reduce post- harvest losses & trading margin Certification Certification Lack of knowledge Agencies for Un certified of crop process may be and interest in certification of crops cannot made easier by certification crop and fruit be fit for export new legislation and process due to are available and good involvement of large no of quality and private sector formalities price at domestic levels. Phytosanitary Certification process Lack of knowledge Certification Un certified and certification results in disease and interest in process may be diseased free production certification process made easier by produce is due to large no of new legislation vulnerable to formalities and non- and involvement heavy losses friendly behavior and of private sector and low cost phytosanitary threats at cross border levels. Trade/Export Bulk surplus fresh Little capacity of Mechanized Unstable produce during farmers and farming to electricity and peak season traders and no reduce cost of gas prices and Some food quality production supply for companies can be infrastructure to Big industry involved in produce, handle, opportunities for Slow processing of and market the food processing development cucumber for companies and
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Parameters Strengths Weakness Opportunities Threat pickles to sale in quality product for exporters in of quality local and export form of pickles, infrastructure, international High cost of quality based Lack of market production can’t contract farming stakeholders compete in between interest in international farmers and capacity market exporters building to No government Quality seed produce and policy to support production for maintain the exporters and local demand to quality product processors reduce seed import Processing Grading at farm Processing Machinery can be Processing of level, processing machinery not made available to cucumber (waxing, grading) available. farmer potentially by and quality packing associations for large may enhance the processing corporations crop value may impact the margins of small processors Value Cucumber can be Little capacity of Emerging addition used in many value- farmers and traders supermarkets can added products such and little quality introduce contract as (Pickle, make up infrastructure to farming which -- products, pulp and produce, handle, and may introduce juice) market the quality value addition value added products products e-Marketing Direct marketing and Lack of knowledge Registered & Conventional time to say good bye and illiteracy, certified produce system is a to conventional Conventional will be sold hurdle for best marketing auctioning in the directly & easily prices to wholesale market without wastage farmers and with visual and spot of time and users. grading involvement of extra stakeholders.
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6. CHALLENGES FACED BY THE CLUSTER
6.1 Climate Change and Increasing Shortages of Water
Frost and strong dusty/sandy winds and storms in Balochistan during flowering/blossoming season greatly impact the yield and quality of production. Climate change related impacts, such as new diseases and shifts in crop cycle are also emerging issues in all the clusters.
Agriculture in Balochistan dependent on underground water which is physically scarce due to over-extraction and variation in the climate, such as prolonged drought. There is no issue of irrigation water for cucumber in Punjab. 6.2 Constraints at Production Level
Extensive extension system of the Department of Agriculture is present in the cluster of Punjab although few extension workers are aware of the technical issues and their solutions in cucumber, while agricultural extension services are not effective at all in Balochistan. Lack of extension services results in low yield and poor quality of the produce. Manual labor is involved in harvesting of cucumber in all the clusters which is major component of production cost.
The expensive imported hybrid seed is a major constraint in cucumber cost of production. The average per ha price of imported hybrid seed ranges from Rs.400,000 to 600,000. The international hybrid seed companies like Syngenta, ICI, Advanta and Sky seeds are providing the seed along with technical assistance to cucumber farmers. The availability of local seed is very limited in Balochistan province.
Table 12: Gaps and constraints at production level
Parameter Southern Punjab Cluster Balochistan Cluster Locally evolved high yielding Varieties Limited availability Not available Certified Seed Limited availability Not available Commercial inputs Available Limited Extension services Adequate Very poor Labor input Family/Local labor Local labor Credit Available Limited Research system Moderate poor
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6.3 Constraints at Post-Harvest Level
6.3.1. Value addition
Value addition is not practiced in any cluster. At present, fresh cucumber is simply graded and packed in netted & plastic bags and sent to the auction markets in major cities, in unrefrigerated vehicle, such as on the rooftop of passenger vans. Obviously, this product fetches a lower price compared to the ‘processed product’, delivered directly to super markets, under the cold chain conditions. In fresh cucumber, processing involves grading and then cooling the fruit to less than 4 degrees centigrade, before packing and loading onto cold containers for transportation. Storage of cucumber is generally done less than 14 days as visual and sensory quality deteriorate rapidly. Shriveling, yellowing, and decay are likely to increase storage beyond two weeks.
Respiration varies up to 10°C above different stages of maturity. Less mature cucumbers have high respiration rates. Harvesting of fruit at advanced stage of development and store at high temperature can cause yellowing. Cucumbers should be packed in strong, well-ventilated containers, which is currently not a practice.
However, despite availability of these technologies, their uptake and adoption are not automatic and requires support, strategy and incentives. The public sector does not have to take up the entire responsibility on its own, but seek win-win solutions by working with the private sector and NGO partners. In both provincial clusters, market links are heavily reliant on the tenacity of the individual processor, creating a constricted market structure.
Table 13: Gaps and Constraints at post-harvest and processing level
Parameter Southern Punjab Cluster Balochistan Cluster Fresh produce handling unit Not available Not available Processing/value addition technologies Not available Not available Ready investment projects Not available Not available Access to energy for processing Available Limited
6.3.2. Constraints at Processing Level
There is no cucumber processing in Pakistan whereas in rest of the world 25% of cucumber production goes to processing. The technologies needed for processing, packaging, and storage varies in quality and efficiency. Many of the processing technologies for fresh cucumber are lacking, which is both a problem and an opportunity for improvement. 6.3.3. Constraints at Trading Level
Most of the produce is traded fresh. Cucumbers are consumed throughout the country and being traded in almost all the major vegetable markets. Farmers tend to send their produce in high value vegetable markets to fetch higher prices. Proper storage facilities are not available
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in vegetable markets. Fresh produce is kept in open and rates are decided on visual basis and overall market situation. Market prices are highly variable depending on season, demand and supply. There is no proper price control policy which results in highly variable returns to producers. Sometimes, the producers get very good price and earn good revenue but there are times, when market prices are so down that farmers can’t even recover their original cost. Whole sellers in vegetable markets are always in win-win position. Communication services in Punjab are easily available and farmers are connected with different vegetable markets in telephonically to get information about current market rates, but such services are relatively weak in Baluchistan. Another major constraint is poor information and ability of local exporters about certifications and regulations required to export produce in high end international markets. Exporters have to face many difficulties for getting registration and quarantine/Phytosanitary certifications for export purpose. There are very few laboratories for testing and issuance of quality certifications.
Traders typically strive to achieve the highest margins by buying at the lowest price and selling at the highest price. Very little attention is paid to product differentiation and quality aspects to achieve price premiums. Communication technologies and internet services are easily accessible, labor is available on a permanent and seasonable basis and financial services to traders are provided by both formal and informal banking institutions.
Although commission agents provide loans to farmers to buy inputs for cucumber, but such contracts are not based on quantity, quality or price. The development workers have to think how to convert the existing contracts into quality, time, and price specific.
Table 14: Gaps and Constraints at Trading Level
Parameter Southern Punjab Cluster Balochistan Cluster Marketing channels Traditional Traditional E-commerce platforms Not available Not available Contract farming Limited No Export readiness Lacking Lacking Certifications (phytosanitary) No No Branding Lacking Lacking
In summary, an agricultural policy guiding public and private investment and sector support programs to develop the vegetable industry is highly desirable both in Punjab and Balochistan. Improvements are also needed with the provision of up-to-date and useful market information to inform producers, processors and traders.
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7. CLUSTER DEVELOPMENT POTENTIAL
7.1. Overview
In this section an attempt is made to evaluate the potential in the clusters in terms of production, quality and market side of cucumber value chain based on the targets set in Section 2 for incremental improvements in the cluster performance. 7.2. Production Potential
The global average yield is 37 tonnes/ ha, whereas in Pakistan it is 16 tonne/ ha thus a yield gap of 21 tonnes/ ha exists. The estimated average yield for Balochistan is 7.0 tonne/ ha and 26 tonnes/ ha for Punjab, respectively.
In this scenario, increase in average cucumber yield can be achieved relatively easily in all the clusters because of the availability of suitable technologies to achieve the target. In this regard, high yielding hybrids along with appropriate production practices can produce 25-40 tonnes/ha cucumbers. Moreover, good agricultural practices are also very much documented. Bringing farmers closer to the recommended inputs and management practices can bridge the huge yield gaps and Pakistan can significantly boost its cucumber production.
The new imported hybrids, varieties, and management practices indicate that actual potential is much higher, but cucumber stakeholders believe that 15% improvement in cucumber yield in Punjab and 40% increase in Balochistan by these technologies is quite probable. This will increase the gross income in Punjab Cluster by US$ 2.40 million and in Balochistan Cluster by US$ 0.77 million. This will increase the production of 14 thousand tonnes in the Punjab cluster and 4.6 thousand tonnes in Balochistan cluster. This additional production of 22.6 thousand tonnes will be just sufficient to replace almost all the imports in the country, which will save the country about US$ 2.2 million. Increasing production potential will result in creation of nearly 600 new jobs at production level in both Punjab and Balochistan clusters. These jobs will be mainly for hired poor wage earner. 7.3. Processing/canning of cucumber
Although possibilities of processing of cucumber exists, such as cucumber pickles and technologies are also available for this, but our discussion with stakeholders suggest that cucumber pickles are not very much liked in Pakistan. Lots of efforts will be required to initially compete in international markets. Therefore, cucumber processing has been dropped. 7.4. Improvement in Quality
One of the areas of concern in cucumber sector of Pakistan is that of gap between domestic and the global prices of the commodity are very high. For example, price of imported cucumber
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is US$ 220 while domestically produced cucumber is US$ 170 indicating poor value chain of domestically produced cucumber. One of the reasons of this difference is the low quality of the produce because of its poor post-harvest handling. If cucumber is passed through the pack- house where it is properly graded, washed and packed before it is marketed, it can substantially improve its quality and price. It is assumed that 20% of the domestic produce in Punjab cluster can be passed through the pack-houses in the concentrated area of cucumber production in the province. This will also require additional certification companies, packaging materials, improved transportation facilities, etc. which can generate some 100 jobs in Punjab. In Balochistan, installation of pack-houses will not be possible because of the small size of production scattered in various districts, however, proper training of the producers about post- harvest management practices like proper washing, packaging, and transportation, etc. is expected to improve the quality of the produce, although improvement in price after these operations will be modest from US$ 170 to US$ 190. 7.5. Saving in Post-Harvest Losses
The improvement in cucumber value chain handling through packed houses in Punjab and training of farmers and other value chain players in Balochistan will not only improve the quality of the produce but also reduce the post-harvest losses. It is estimated that such management will reduce post-harvest losses from 10% to 5% in Punjab and from 10% to 5%. This will generate an additional income of US$ 0.89 million in Punjab and US$ 0.12 million in Balochistan to various stakeholders along the chain 7.6. International Standards
To improve the quality and price of cucumber to international level, adoption of international quality standards at each segment of the value chain is required. IPPC (International Plant Protection Convention) is the international treaty under which common standards are developed for pest control in plants and plant products across international borders. The Commission on Phytosanitary Measures (CPM) is the governing body of the IPPC and it has adopted a number of International Standards for Phytosanitary Measures (ISPMs) that provide guidance to contracting parties in meeting the aims and obligations of the Convention.1In addition, each country has its own specific standards for each crop. Lot of work is needed to become competitive in international market. But if the country can invest R&D and quality infrastructure, it can generate extra revenue and employment in cucumber sector in the country. Most of this employment will be generated to the poor in crop production and value chain management processes thus helping to bring down poverty in rural areas.
1Adopted International Standards for Phytosanitary measures (ISPMs). https://www.ippc.int/en/core- activities/standards-setting/ispms/#publications
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8. PLAN, POLICIES AND STRATEGIES 8.1. Plan
The purpose of the whole exercise is to develop a research-based cluster transformation plan for cucumber to achieve the following targets.
Targets of Cucumber Cluster Plan
Increase yields by 20% from the current base Reduce postharvest losses by half from the current benchmarks Transforming the country into self-sufficient in cucumber and possibly net exporter Improve the value chain of cucumber to enable the cucumber to compete with imported cucumber. 8.2. Policies
At the policy level, the current practice of providing general subsidies and “export rebates” to selected commodities should be eliminated, as these are grossly abused. Instead, subsidies and incentives should be specific and result driven. Moreover, investment incentives for quality infrastructure should be carefully reviewed and enhanced. A nationwide program should be developed, in which all districts can compete for Cluster Development Grants to specialize in specific high-value crops for export. Another policy recommendation is to include cucumber in bilateral/multilateral trade agreements with friendly countries especially with China and try to seek help from China for improved value chain management. There is lot of potential in this area due to seasonal difference with China and European markets.
At the local level, supporting farmers to organize themselves as marketing groups, such as Farmers Enterprise Group (FEGs), would be a key element of the strategy, for achieving economies of scale, access to inputs, finance, technology, and market information, especially in the Punjab where farm size is small. It is, therefore, suggested that these special incentives should be organized for these groups, especially in the focal points of cucumber clusters. The FEGs should be established by combining various cucumbers producing union council. Special loans can be provided on concessional terms to each FEG to allow them to market their cucumber under a brand name, help various stakeholders in adopting best practices, hold trade fairs, competitions and arrange various training events, etc. The FEGs should ensure the quality of cucumber at the group level and negotiate terms for contract farming.
The farmers of the two clusters should join some other association to voice their issues at the national level. The associations should have a website of its own on cucumber and work to promote best practices, share knowledge, technology and lobby with government for enabling policies, on behalf of its members.
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8.3. Strategies for Southern Punjab Cluster
8.3.1. Production Level Strategies
The primary production strategy is to narrow the yield gap with the global average. The plan is to increase the yields from the current base of 15 tonnes per ha to 20tonnes per ha, or closer to the global average of 37 tonne/ha. This will be done by:
a) Importing high quality germplasm: The Punjab needs germplasm having traits of high yields with tolerance to frost and resistant against mildew and other diseases. Such germplasm can be obtained from China, Chile, France, Italy, Turkey, or USA. So diplomatic and commercial links should be used to get the much-needed germplasm from these countries.
b) Supply of latest and certified varieties/hybrids to farmers: Available or imported improved cucumber varieties/hybrids in protected cultivation will be promoted to farmers within the 1styear of the project by establishing demonstration fields of these varieties/hybrids in the focal districts of both the clusters of Punjab.
c) Establishment of Strong Cucumber Research Program: For long-run sustainability, a strong research program on cucumber will be established in BARI, Chakwal, Punjab and Ayub Agriculture Research Institute (AARI) Faisalabad covering important issues along the value chain. The program will initially rely on the selection of high yielding material from the wide array of germplasm collected, but later it will do some breeding work in developing new varieties/hybrids for protected cultivation. Special varieties/hybrids will be screened for protected cultivation for fresh market. The advance lines (not varieties) will be tested in different districts of Punjab and to finalize the varieties suitable for the cluster.
d) Promotion of protected cultivation: Protected cultivation will be supported through FEGs by providing subsidies to the plastic tunnels and drip irrigation system.
e) Training: Five established cucumber fields in the cluster will be used as demonstration plot where good agricultural practices will be adopted and farmers will be frequently invited for training purpose. It will be highly desirable to invite experts from China to help in putting in place specific phytosanitary standards needed for export to China in these demonstration plots. Moreover, 100 farmers will be provided on-hand training in each cucumber growing district of the cluster. One of the key objectives of this intervention shall be to bring the postharvest losses from 10% of total production down to 5% in Punjab over five years.
8.3.2. Value Addition Level Strategies
Value addition means harvesting at the right time, washing the product immediately after harvest, cooling, sorting, grading, retail packaging and branding. In this way, not only higher prices are ensured but the product’s shelf life can be extended and retail level losses are
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reduced. The main value addition strategies would be providing pack-houses in the Punjab cluster while providing training to farmers and value chain actors on proper management of the crop at the time of harvesting and post-harvesting. This will be achieved by:
a) Branding of Cucumber products: Each FEG will get its product branded and cost of branding will be initially borne by the FEG and charged from the farmers who will sell their fresh and canned produce through the FEGs. For branding, the ‘Fresh’ and ‘Organic Food’ business models are additional options to improve the value for the farmer groups and other value chain actors. Certifications for IPPC, Phytosanitary, Organic and Fair Trade can be pursued as other value-added strategies.
b) Forming Cucumber Association of Pakistan: This should be a joint activity for all the clusters, which should have a website and develop its own marketing apps.
8.3.3. Marketing and Trading/Export Strategies
Multi folds strategies are suggested to improve marketing and trading at domestic and international levels. Currently, Pakistan is not a regular cucumber exporter. For its export to the world market proper commercial strategies are required. To bring our production to export ratio at par to the world average level in five years, following strategies are suggested:
Improve production through increase in area, introducing new cultivars and promoting best management practices.
Providing market information. A small cell will be established in the department of agriculture in Punjab each consisting of three scientists (marketing specialist, economist and information analyst) with supporting staff which will provide information to the stakeholders about international market requirements (i.e., standards, price, potential buyers, etc.).
Sponsoring international tours. Top three best exporters will be sent abroad every year to identify potential markets and new buyers at 20% government expenses.
Holding competition and rewards for exporters. Special competition will be held and rewards will be provided for outstanding exporters of value added fresh cucumber. These competitions will be held at the cluster level. 8.4. Strategy for Balochistan Cluster
The Balochistan is not good on the production side because of scarce resources and distant locations of farms, compared to the Punjab. For example, there is scarcity of water and electricity in Balochistan and problem of road infrastructure; here farmers are going through a transition from subsistence to the commercial farming. Still, there is room for improvement. The following strategies are recommended for interventions related to production technology, management, product diversification, market segmentation and other value-added measures that are needed to be taken to get maximum value from the cucumber cluster.
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8.4.1. Production Level Strategies
Appropriate production practices, careful harvesting, cooling, proper packaging and transport, all contribute to good produce quality. In order to reduce post-harvest losses of cucumber, there is a need for better handling, packing and grading. Policy makers need to know more about the costs and benefits of investment for loss reduction. The extra cost afforded by the consumer in the form of multiple and poor grading can be reduced by proper packing and grading. In this connection, there is an urgent need to develop the confidence of both producers and retailers on grading. Beside this, quality cannot be improved after harvest; therefore, it is important to harvest cucumber at the proper stage, size and at peak quality. Immature or over mature produce may not last long in storage.
The production strategy for the Balochistan is to increase the yield by 300% from the current base of 7 tonne/ha. This will include importing germplasm from Chile, France, Italy or Turkey and multiplying it in government facilities.
In the Balochistan, a key production constraint highlighted earlier is water scarcity and the threat of prolonged droughts. To address this problem, it is important to select high-yielding varieties/ hybrids that are resistant to the vagaries of a changing climate, such as droughts. The following specific interventions are proposed:
a) Importing high quality germplasm. Balochistan also needs infusion of new germplasm, having specific traits to suit the prevailing conditions in the province, such as tolerance to drought and pests. Such germplasm can be imported from China, Turkey or USA (California). Bilateral and multilateral agencies can be approached, such as Consultative Groups on International Agriculture Research (CGIAR), FAO or the Chinese Academy of Agricultural Sciences(CAAS) as well as Pakistan’s missions overseas, for assistance in accessing the require germplasm.
b) Development and supply of latest and certified varieties/hybrids to farmers. A strong breeding program needs to be established in collaboration with the Directorate of Agriculture Research, Government of Balochistan. This breeding program can initially focus on the selection of high yielding materials from a wide array of germplasm collected, but later it can undertake long-term breeding work in developing new varieties/ hybrids.
c) Promotion of protected cultivation: Protected cultivation will be supported through FEGs by providing subsidies to the plastic tunnels and drip irrigation system.
d) Training: Five established cucumber fields in the cluster will be used as demonstration plot where good agricultural practices will be adopted and farmers will be frequently invited for training purpose. It will be highly desirable to invite experts from China to help in putting in place specific phytosanitary standards needed for export to China in these demonstration plots. Moreover, 100 farmers will be provided on-hand training in each cucumber growing district of the cluster. One of the key objectives of this intervention shall be to bring the post-harvest losses from 10% of total production down to 5% in over five years in Balochistan.
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8.4.2. Value Addition Level Strategies
As in the Punjab, value addition is missing steps in the Balochistan. Therefore, the strategy would be the same for the establishment of cold chains. This will be achieved by incentivizing the private sector to establish pack-houses in cucumber growing areas which include grading, washing, packing, and small cold stores for fresh cucumber for export and domestic market. The feasibility of cucumber pack house is given in Annexure 3.
In Pakistan all fresh fruit and vegetables are traditionally traded and marketed in open retail shops and small push-carts and cucumber are no exception. The global trend is supermarkets, where highly perishable items are displayed under canned and cold conditions and supermarkets are coming to Pakistan too. Going forward, it is important to establish cold chains, especially for cucumber to avoid losses, extend shelf life and preserve freshness and obtain a higher price. The plan includes the following interventions.
a) Branding of Cucumber products. Balochistan is well known in the Middle East for fresh fruit and vegetables, and it could be a good brand name. Different districts can also develop their own brands. Under the cluster development plan experts will be hired to develop cucumber brands for Balochistan.
b) Certifications for IPPC, Phytosanitary, Organic and fair trade can also be pursued as other value-added strategies.
8.4.3. Marketing and Trading Level Strategies
To increase the export to production ratios various measures including; a) the provision of market information (standards, process and potential buyers) have been suggested. In this regard, a small cell in agriculture department will be established to regularly provide market information to various stakeholders; b) Sponsoring international tours – for example top three exporters shall be sent abroad on exposure visits at 20% government expenses; and c) Holding of competition and rewards for exporters.
Measures are to be taken to improve the quality and export price and in order to meet the international standards. The suggested interventions include; a) provide incentives for adopting best practice and certification regimes - for this, special tax incentives will be provided to establish certification companies in the Province. The government will also incentivize various stakeholders along the value chain to adopt these practices by paying 20% of the machinery cost recommended by the certification agencies at various levels. However, farmers have to agree to pay for any additional infrastructure, labor, and monitoring costs. b) Training stakeholders to adopt ISPMs. International consultants will be engaged by the FEG to spell out requirements at production, processing, transportation, storage, marketing levels and provide training of trainers who in turn will train farmers, processors, traders, exporters, etc. to adopt the ISPMs standards. Three hundred farmers and 25 other stakeholders will be trained to adopt the ISPMs in each cluster every year. A common intervention proposed is to establish a Cucumber Association of Pakistan with an interactive website and marketing apps.
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9. BENEFITS AND COSTS OF CLUSTERING
This chapter discusses the costs associated with cluster development strategies presented in previous chapter. This also identifies resources and requisite inputs for achieving all the targets given in Chapter 2. An economic and social impact analysis has also been conducted that evaluates the benefits of the cucumber cluster development interventions in two target regions of Punjab and Balochistan. 9.1. Investments, Costs and Returns in Punjab and Balochistan
An investment of US$ 0.84 million is needed to support the cluster development efforts in Southern Punjab Cluster. Little more than one half (53%) of this investment will be required by the public sector and remaining will come from the private sector. Twenty percent of the public sector investment may be provided by the federal government by establishing a Cluster Development Fund (CDF) under Planning Commission of Pakistan (PCP). The remaining 70% should come from the provincial budgets.
Details are given as in the following table for South Punjab Cluster;
Table 15: Inputs and infrastructure needs for development of South Punjab cluster
Cluster-1 Implementing S# Cluster Strategy Interventions Agency 1 Production level Importing high yielding good quality cultivars PARC, AARI, UAF strategies Adaptability testing and supply of certified seed to the (To increase yield farmers by 50%) Strengthening the breeding program and seed production of cucumber in the region Development of economical and sustainable production technology package Establishment of demonstration plots and training of Agri. Extension farmers for improved production practices Dept. Punjab Cost of this component (000 US$) : 1813 2 Value addition Cooling, sorting, grading, retail packaging and branding PARC, PHRC strategies Providing pack-houses along with training on pre and post- (AARI), PFVA harvest aspects Branding of cucumber and formation of associations Cost of this component (000 US$): 360 3 Marketing & One window operation for quality and quarantine PFVA & PARC Trading level certification strategies Provision of market information on standards, price and (Increase the export potential customer segments to production ratio Sponsor international tours for high potential exporters to world average of Holding of competition and rewards for exporters
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4% in five years; Provide incentives for adopting best practice and Improve the quality certification regimes and export price up- Establish a cucumbers exporters association under to international umbrella of PFVA with a website and marketing apps standard) Train the stakeholders to adopt ISPMs as per IPPC
Similarly, an investment of US$ 0.90 million is proposed for improving the cucumber cluster in Balochistan. This shall help strengthen the production, processing and market segments of cucumber value chain in the province.
Table 16: Inputs and infrastructure needs for development of Balochistan cluster
Cluster-2 Implementing S# Cluster Strategy Interventions Agency 1 Production level Importing high yielding good quality cultivars PARC, Provincial strategies Agricultural R&D Adaptability testing and supply of certified seed to the (To increase yield by Department farmers 300%) Strengthening the breeding program and seed production of cucumber in the region Development of economical and sustainable production technology package Establishment of demonstration plots and training of Agri. Extension farmers for improved production practices Balochistan Cost of this component (000 US$) 243 2 Value addition Cooling, sorting, grading, retail packaging and branding PARC, Provincial strategies Providing pack-houses along with training on pre and FS&T Department, post-harvest aspects PFVA Branding of cucumber and formation of associations Cost of this component (000 US$) 64 3 Marketing & Trading One window operation for quality and quarantine PFVA & PARC level strategies certification (Increase the export to Provision of market information on standards, price and production ratio to potential customer segments world average of 4% Sponsor international tours for high potential exporters in five years; Improve Holding of competition and rewards for exporters the quality and export Provide incentives for adopting best practice and price up-to certification regimes international standard) Establish a cucumbers exporters association under umbrella of PFVA with a website and marketing apps
Train the stakeholders to adopt ISPMs as per IPPC Investment costs of the above activities are summarized in the Table 17. 9.2. Summary of Investment Costs
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Table 17: Summary of Investment costs
Description Value
Southern Punjab
Total Investment (million US$) 0.841
Total ha of land in Southern Punjab under cucumber production 1895
Estimated investment per ha (000 US$) 0.443
Balochistan
Total Investment (million US$) 090
Total ha of land in Balochistan under cucumber production 925
Estimated investment per ha (000 US$) 1.0
*Currency conversion rates @Rs.135=1 US$
The estimated investment cost per ha in Southern Punjab is US$ 443 whereas it is US$ 1000 in Balochistan. Detailed reasons of the cost and benefit will be discussed in the next chapter. 9.3. Economic, Social and Environmental Returns
The proposed investments are likely to generate substantial economic, social and environmental returns. As discussed in the previous chapters, the key objective of cluster development is to improve the overall efficiency of cucumber sector in the country. This efficiency shall be realized as a result of measures taken at production, processing and marketing levels as shown in the form of various interventions in table 18.
Total value chain cost including those of production, washing, grading & packing, transportation, marketing, storage, shelving and retailing are applicable from year 2 to year 5, the total of which ranges from US$ 203,843 in 2nd year and US$ 1,087,155 in 5th year. The total initial cluster investment is US$ 841876 in Southern Punjab.
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Table 18: Economic Returns and Investments in Southern Punjab
Overall Parameters Year 1 Year 2 Year 3 Year 4 Year 5 (US$) Current Situation 25,382,615 - 6,158,425 6,281,594 6,407,226 6,535,370 Yield, production and value First Intervention 2,403,180 - 230,941 471,120 720,813 980,306 Increase yield by 50% over 5 years Second Intervention 891,770 - 79867 168818 267301 375784 Post-Harvest losses to be reduced from 20% to 10% Third Intervention 506,226 - Improvement in value chain 14,428 61,748 148,444 281,605 Economic Returns 3,801,175 - Economic returns after interventions 325,236 701,686 1,136,559 1,637,694 Net Economic Returns 1,325,017 - Economic returns when costs are offset 121,394 254,701 398,383 550,540 Cluster Investments 841,876 Total investments made 306,292 267,792 210,042 57,750 Net Benefits (US$) Discount Rate (8.5%) -306,292 -146,398 44,659 340,633 550,540 PV of Economic Returns 125,900 (US$) -282,297 -124,359 34,964 245,792 366,134 Estimated Internal Rate of Return (IRR) 25.5%
A discount rate of 8.5% is applied to calculate the discounted values of investments as well as to estimate the present value of future economic returns. Based on these parameters, the present value of the future economic returns range will be negative in 1st and 2nd year, and positive in subsequent years. Total NPV will be US$ 125.9 thousand. The Internal rate of return is estimated 25.5% (Table 18).
Table 19: Economic Returns and Investments in Balochistan Overall Parameters Year 1 Year 2 Year 3 Year 4 Year 5 (US$) Current Situation 3,099,569 - 774,660 774,815 774,970 775,125 Yield, production and value First Intervention 774,970 Increase yield by 300% over - 77,466 154,963 232,491 310,050
5 years Second Intervention 125,935 Post-Harvest losses to be - 10,652 23,244 37,780 54,259
reduced from 20% to 10% Fourth Intervention 15,386 - 1,269 2,803 4,611 6,703 Improvement in value chain Economic Returns 916,290 Economic returns after - 89,386 181,010 274,882 371,011
interventions Cost Heads 712,828 - 52,830 121,915 211,614 326,468
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Different cost heads from value chain Net Economic Returns 203462 Economic returns when costs - 36,557 59,095 63,268 44,543
are offset Cluster Investments 90,000 Total investments made on 36,000 27,000 13,500 13,500
the cluster Net benefits (US$) 113,462 - 9,557 45,595 49,768 Discount Rate (8.5%) 36,000 NPV of Economic Returns 46,546 - 8,118 35,697 35,911 29,623 33,180 Estimated Internal Rate of Return (IRR) 72%
Total value chain cost including those of production, washing, grading, packing, transportation, marketing, storage, shelving and retailing are applicable from year 2 to year 5, the total of which ranges from US$ 52830 in 2nd year and US$ 326468 in 5th year. The total initial cluster investment is US$ 90,000 in Balochistan.
The net economic benefits after offsetting the value chain costs from revenues shall be negative in 1st and 2nd year. This amount is exactly equal to the value chain costs in year 1 and 2, as no revenues or benefits are expected in 1st and 2nd year of cluster development interventions. The 1st and 2nd year of interventions is rather considered as the incubation period.
Based on these parameters, the present value of the total future economic returns (NPV) US$ 45,546. The Internal rate of return is estimated 72%, which is not feasible for investment in this cluster.
Any environmental degradation is unlikely to happen from promotion of cucumber clusters; rather the increase in cucumber plantation shall contribute towards plant diversification and soil stabilization, though most of the production will come from protected plantation. The climate change impact manifesting in fluctuating temperatures, variable precipitation, and more frequent and intense climate events, there is clearly a need to reduce the risks so as to make the communities more self-reliant and climate resilient. 9.4. Conclusion
In conclusion, the overall economic, social and environmental impact of the cluster development program shall be positive, sustainable and long lasting except in Balochistan Cluster. Accounting for all the fixed costs and variable costs including the production, processing and marketing cost, the estimated Internal Rate of Return (IRR) for Southern Punjab 25% and for Balochistan is 72%, the IRR is based on respective investment costs in each region and the present value of resulting revenues over the period of five years. These estimated IRRs signify the fact that cluster development interventions are likely to positively impact not only the existing output of cucumber clusters, but also likely to add additional value increasing the overall potential of the cucumber value chain across the country.
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10. PROGRAMS AND PLANS
This report presented an overview of the potential of cucumber sector in Pakistan. Cucumber clusters identification as part of the V2025 of GoP, the gaps, constraints and potential cucumber clusters in Punjab and Balochistan were identified. Gave recommendations for cluster development in both the regions; and estimated the economic and social impact of the cluster development interventions that shall set new frame conditions at production, value addition and marketing level of cucumber value chain in both the regions. In support of the findings and recommendations presented in previous chapters, the following plans and programs are proposed for further value addition.
In support of the strategies and interventions proposed in chapter 8 of this report, the following programs/plans are recommended to further strengthen the interventions and to create greater opportunities for participation and learning. 10.1. Organization and Networking of Stakeholders
The following program is proposed for organization of stakeholders at different levels of value chain.
Table 20: Program for Organization and Networking of Stakeholders
Institutions to be S#. Area of Action Purpose Priority involved 1. Punjab 1.1 Form Cucumber Farmer Enterprise Organization of Village Organizations Short to Groups (FEGs) at grassroots level. 2 cucumber (VOs), LSOs, NGOs medium term FEGs in total with each having a farming (AKRPS), DoA, Punjab, (1 to 2 years) membership of at least 50 farmers. community for Department of rural Punjab has 18 Cucumber producing collective action development Punjab districts, and thus 1 FEGs per district 1.2 Form Cucumber Traders Association at Improve DoA, Punjab, NGOs, Short to market/business level. At least 10 coordination Private Sector medium term associations should be initially involved between the (1 to 2 years) (five in each cluster) stakeholders of cucumber value chain 2. Balochistan 2.1 Form Cucumber Farmer Enterprise Organization of NGOs, DoA, Short to Groups (FEGs) at grassroots level. 4 cucumber farming Balochistan, medium term FEGs in total with 1 FEG in each community for Department of rural (1 to 2 years) Cucumber producing district and FEG collective action development each having a membership of at least Balochistan. 30 farmers 2.2 Form Cucumber Traders Association at Improve DoA, Balochistan, Short to market/business level. At least 5 coordination NGOs, Private Sector medium term associations should be initially between the (1 to 2 years) involved. stakeholders of
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Cucumber value chain
10.2. Program for Research Reform
The following program indicative areas for further research to strengthen the cucumber cluster in the two regions are proposed along with the estimated costs.
Table 21: Program for Research Reform
Identification of Areas for Further Indicative Research S#. Research Purpose/ Priority Research Institutions 1. PUNJAB 1.1 Identify suitable cultivars for Cucumber production BARI, Chakwal, AARI, cucumber growing areas improvement PARC, DoA, Punjab Develop strategy for quick (Short to medium term (1 to 2 dissemination years) 1.2 Develop training modules Improve production BARI, Chakwal, AARI, Develop formats for Farmer Field management and On-farm PARC, DoA, Punjab Schools (FFS) for on-farm training skills of cucumber producers (Short to medium term (1 to 2 years) 1.3 Survey for identification of target Product Diversification for BARI, Chakwal, AARI, group of 10 associations Cucumber PARC, DoA, Punjab (Short to medium term (1 to 2 years) 1.4 Consultation with associations to Create market Linkages for BARI, Chakwal, AARI, assess interest in establishing pack value added Cucumber PARC, DoA, Punjab houses (Domestic and Export) Scoping survey to identify new Medium to long Term (2 to 5 products and potential buyers years) 1.5 Identify suitable fresh produce Medium to long Term (2 to 5 BARI, Chakwal, AARI, buyers to link with in premium years) PARC, DoA, Punjab markets through a market survey Consultation to decide on implementation strategy – wholesale market or individual traders 1.6 Research into climate change related Investigate into climate related BARI, Chakwal, AARI, negative impacts such as new negative impacts on PARC, DoA, Punjab diseases and shifts in crop cycle horticulture Medium to Long term (2 to 5 years) 2. BALOCHISTAN 2.1 Survey for identification target group Product diversification from Private businesses, DoA, of 4 processors Processed Cucumber Balochistan Short to medium term (1 to 2 years) 2.2 Consultation with processors to Create market linkages for Private business, DoA, assess interest in establishing a quality Processed Cucumber Balochistan, Export Fruit Processor Association (Domestic and Export) Promotion Board, Scoping survey to identify new Medium to long Term (2 to 5 Embassies products and potential buyers years)
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2.3 Identify suitable fresh fruit traders to FEG clusters; supporting the cluster Medium to long term (2 to 5 Farmer Associations; Identify suitable fresh fruit buyers to years) Business associations and link with in premium markets cooperatives through a market survey Consultation to decide on implementation strategy for wholesale market or individual traders 2.4 Research into climate change related Investigate into climate related DoA, Balochistan, P&D negative impacts such as new negative impacts on department, Research diseases and shifts in crop cycle horticulture Institutions Medium to Long term (2 to 5 years) Note: The estimated costs for research plan mentioned in the above table have already been counted as part of the cluster investments given in chapter 10)
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11. ANNEXURES
Annexure 1: Macro Data Sources and Literature Reviewed
1. Agriculture Statistics of Pakistan (2015-16), Ministry of National Food Security and Research, Pakistan: http://www.mnfsr.gov.pk/frmDetails.aspx 2. Alboghdady M.A.A., M.A. Shata (2014) Stochastic frontier analysis of cucumber production under different cultivation systems in Ismailia Governorate, Egypt. Journal of Agricultural Economics and Social Sciences, Mansoura University 5: 1063-1073. 3. Brian Geiger. 2011. Cucumber Preservation, Fine cooking magazine 4. FAO (Food and Agriculture Organization) (2006). Postharvest Management of Fruit and Vegetables in the Asia-Pacific Region, FAO, Rome 5. FAOSTAT (Food and Agriculture Organization Statistics) 2020 (Production, Crops http://www.fao.org/faostat/en/#data/QC 6. FAOSTAT, (Food and Agriculture Organization Statistics). 2020. Trade, Crops and Livestock Products http://www.fao.org/faostat/en/#data/TP 7. PFVA. 2017. ‘Balochistan’s fruits, veg. exports can fetch $1 billion a year’. The News International. Accessed online from www.thenews.com.pk/print/240162-Balochistans- fruits-veg-exports-can-fetch-1-billion-a-year 8. SMEDA, 2016. Pre-feasibility study (offseason vegetable farming–high tunnel). Small and Medium Enterprises Development Authority, Ministry of Industries & Production, Lahore. 9. Ibrahim HY, O.A. Omotesho (2013) Determinant of technical efficiency in vegetable production under Fadama in northern guinea savannah, Nigeria. Journal of Agricultural Technology 9: 1367-1379. 10. Iqbal Q, M. Amjad, M.R. Asi, M.A. Ali, R. Ahmad (2009) Vegetative and reproductive evaluation of hot peppers under different plastic mulches in poly/plastic tunnel. 11. Fruit, Vegetable and Condiments Statistics of Pakistan (2016)., Ministry of National Food Security and Research, Islamabad. 12. UN&PO (Unrepresented Nations and People’s Organizations). 2015. Balochistan: Severe Water Shortage Due to Climate Change and Pakistani Actions: https://unpo.org/article/18690
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Annexure-2: List of Stakeholders Consulted
The following stakeholders were consulted during this feasibility study exercise
S# Name Title Location Contact 1. Aqeel Feroze Assistant Horticulturist BARI,Chakwal 03027302043 2. Dr. Ghulam Jellani Principal Scientific Officer HRI, NARC +92 51 9255061 3. Mian Shaukat Farmer, Seed Trader Mamon kanjan 03454111141 4. Iftikhar Ahmad Famer Attock 0344-9628112 5. Khadim Hussain Farmer FatehJang 0335-5457591 6. Shaukat Rasool Farmer Chakri 03462020829 7. Haji M. Israr Trader Quetta 03347645459 8. Waseem Baran Horticulture Baluchistan 03337810705
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Annexure-3: Feasibility Study for Cucumber pack house The production and consumption of Cucumber (Cucumis sativus) is increasing in Pakistan. Cucumber cultivation in tunnels has become famous among farmers to meet growing demand in the country. There are three different uses for cucumbers on the market: fresh, freshly cut and in brine. The issue of post-harvest handling facilities for horticultural products has not been attended for the emerging cucumber farmers. In addition, the low prices that farmers have received from local markets have convinced most cucumber growers to bypass local markets in established national markets, where demand is mostly high and prices are therefore good. In these markets, products can be sold to domestic and foreign consumers. However, due to poor management after harvesting of cucumber, the quality and presentation of the produce remain poor thus it does not fetch good price. To overcome this problem, we propose here to incentivize pack-houses in cucumber producing areas which will improve post-harvest management, improve its presentation, and fetch high price.
Objective: The aim of this study is to produce a feasibility report on the cucumber pack house. The pack house will include packaging, grading and supply of cold stores, which could benefit producers for high-end emerging market by increasing their incomes as they supply high quality fresh cucumbers with proper presentation.
The diagrammatic process flow is described below;
Harvesting
Dumping into field lugs or bulk bins & placing into bags
Transportation to pack house
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Elimination of damaged fruits
Washing, brushing with soap and fungicide & rinsing in fresh water
Drying & waxing
Sorting for quality & sizing
Packing in Cartonnes
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Palletization
Loading and transportation to markets
Process flow of post-harvest handling of cucumber
Packing Process
For designing a pack house following stages are required to be considered in general:
Step One
The first step is to know what the volume of cucumber is needed to be processed during the season. This will determine what equipment will be needed, its capacity, the size of the building and cold storage. An important consideration for the packing shed location is the nearness to the production field and access roads. Since the packing shed is usually in operation during the hot summer months, a site with shade would be beneficial, although this may not be feasible for a small operation. To keep the building cool, good ventilation and fans will be needed. Insulation will also help keep the building cool.
Step Two
Next, develop a flow diagram of all the post-harvest handling processes, which will be used with cucumber. This diagram will help the layout development of the packing shed.
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The produce should always move in one direction, with no crossovers of the product from each step in the packing operation. This has become more important, as fresh produce handling methods must now include procedures and practices to prevent the spread of pathogens. Since there are no steps like heating to eradicate pathogens in cucumber, action must be taken to prevent contamination and recontamination. There should be one door for receiving produce from the field, and one door for shipping packed produce out. The workers should wear gloves and avoid direct body touch with the produce. Step Three
Arrangements must be made for a good water source and adequate utilities. Water used to wash the produce must be potable (safe to drink an approximately 2-inch main water line with 1-inch laterals is recommended. The floors should be sloped to 6 inches wide drains that are 6- to 8-inches deep. Hot water is needed for cleanup and workers personal hygiene. The produce washing water should be chlorinated from 100 to 200 ppm. This recommended level kill pathogens that cause produce decay. However, it is not high enough to kill some food borne pathogens. The chlorine level should be checked throughout the day. As time passes, chlorine ions bind to organic matter and lose their effectiveness. Chlorination can be achieved by using household bleach, swimming pool chlorine or injection of compressed chlorine gas into the washing water. If a dump tank is used, the water should be changed frequently, especially if root crops or ones that had contact with the ground are being packed.
Special attention needs to be given to the electrical requirements of the packing shed. It may be housing automated washing and sizing equipment and cold storage units. The refrigeration equipment for the cold storage and chilling water for hydro-cooling often requires 3-Phase electrical power. Step Four
The disposal of both liquid and solid waste is an important consideration in designing and setting up a packing shed. Maintaining and conserving water quality becomes an issue for produce operations— how to properly handle wastewater from the packing line can also become a problem. Wastewater should never be dumped into the household septic system or the septic system for the toilets, showers and sinks in the packing facility.
The volume of wastewater will overwhelm these systems and reduce their effectiveness. Floor drains will be needed in the facility to carry wastewater to a separate septic field. The solid waste (culled produce) may be composted, spread on fallow fields or sold as animal feed. Step Five
Design a receiving area and packing line, which is fit for individual needs. The receiving area should be elevated so that produce can be easily unloaded off the trucks or wagons carrying it from the field.
The height will depend on the vehicles used. Dollies, pallet jacks, and forklifts can then be used to load several harvest containers. The shipping area should also be elevated for easy loading to markets.
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Loading Dock
• Packing Lines
The packing line is always multifunctional, regardless of whether it is a sink and table or a high- speed automated conveyor line. Photographs of different types of packing facilities are given below
Field Packing
Large scale packing line
Small scale packing line
Below are the parts of an all-purpose packing line:
A receiving area, which can include a dump tank to initially clean and cool produce. A washing area, which can include the dump tank and a spray washer/brusher. This can be part of a conveyor belt system that automatically moves the produce, or simply a stock tank. The water used should be chlorinated at 100 to 200 ppm.
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Automatic washer
A drying area for the wet produce. Before being packed into containers, produce may be dried on sponges in a conveyor system or on screening tables. An area for grading and sizing. Some culling can be done initially in the receiving area, especially if the produce is diseased, low grade or deformed. This can be a large table where produce can be spread out for inspection, a rotating table or conveyor belt with a seizer. An area for packing produce into shipping, holding or marketing containers. This is often done in conjunction with grading and sizing. There are specialized pieces of equipment for specific crops.
Cucumbers are waxed to limit water loss for the wholesale market-therefore, it needs a waxer. Cucumber are sold in bags of various specifications, therefore pack house must have weighing machine to fill the bags according to the required specification. Scales must be certified by Department of Agriculture Division of Weights and Measurements. For high-end market, cucumbers are packed in corrugated boxes or in container. After produce has been packed into shipping containers, the container should be labeled with what it is; the size, count or net weight; grade; the shipper’s name and address; the date packed and a tracking code that incorporates the harvest date, bin number, packing time, packer number, inspector number and gassing room number for tomatoes and Honeydew melons.
Components of a Pack House
Apart from main packing lines, the following facilities are also required to be made part of pack house for its proper management and handling practices.
Product arrival and pre-cleaning/sorting Main grading washing and packing hall Cold storage
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Product arrival and Pre cleaning/sorting
The amount of heat in produce is governed by the temperature around it. The temperature difference between newly harvested produce and its optimum storage temperature is an indicator of field-heat. Rapidly lowering the temperature of harvested produce to near storage temperature is known as pre-cooling, or removal of field-heat. Produce is usually pre-cooled to 78 or 88 percent of the temperature difference. Additional cooling is limited by the time and energy required to reduce the produce temperature to the optimum storage temperature.
Pre-cooling equipment and procedures need to be incorporated into the packing shed design. Packed produce should pass quickly and efficiently from the packing line to the pre-cooling area. Removal of field heat from the produce is important to prolong and maintain its post- harvest life.
Many methods are available to pre-cool fruits and vegetables. It is essential to rapidly cool produce to optimum storage temperature. Studies show that pre-cooling greatly increases produce storage life. Without pre-cooling, many common fruits and vegetables would not be available in quantity and quality. Cold storage slows produce respiration and breakdown by enzymes, slows water loss and wilting, slows or stops growth of decay-producing microorganisms, slows the production of ethylene, the natural ripening agent, and “buys time” for proper marketing. Metabolic activity of fruits and vegetables produces heat. Produce also stores and absorbs heat. The objective of optimum storage conditions is to limit the production, storage and absorption of heat by produce. Following are the most common pre-cooling methods used internationally: Room Cooling Hydro-cooling Evaporative Cooling
If hydro cooling is used, special attention must be made to how the cooling water is managed. If the water source can supply both the packing line and the hydro-cooling, then where and how the waste water will be disposed needs to be addressed and dealt with.
If air-cooling is used, extra cold storage units and high-capacity refrigeration units will be needed. Cold storage is the last stop before the produce is shipped to market. For a small grower who markets what they pack daily, this may be just a cool corner by the door before it is loaded for market.
Refrigerated cold storage is recommended if the produce is not marketed every day. It should be close to the shipping area.
Main grading washing and packing hall:
The main grading washing and packaging hall is the place where most of the operation will be conducted. A proposed layout of the facility is attached as under;
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Map of the cucumber pack house
Machinery and Equipment: Selection of plant and machinery is the most important decision for setting up a food processing unit. All machinery and equipment used in the processing line should have proper efficiency. All the plant and machinery should be erected in such a way that the material flow is unidirectional to avoid cross contaminations. The machinery should not occupy more than 1/3rd of the total floor area for smooth operation of labor.
1. Chain Pulley Block Capacity: 5 Tonne Supplier: Max Industries, India Supplier Product Code: HH2050 Price: US $1200 Power Source: Hand Pulled 2. Motorized Conveyor for Bulk Material Handling Supplier: AMC System Technology (Suzhou) Co., Ltd Model No. – AMCRL006 Dimension (L*W*H) – Customized Voltage – 110V/220V/380V Power – 1500 W or Customized Capacity – 1500kg or customized Price – US $1300
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3. Hydraulic Pallet lift (manual) Supplier: Baoding Dali Hoisting Machinery Co. Ltd Model No. – PDL -3T hand Pallet Price – US $250
4. Box Strapping Machine Supplier: Henan Bedo Machinery Equipment Co. Ltd Model No. – BD-001 Voltage – 220V Power – 50 KW Price – US $250
5. Electronic Weighing Machine Supplier: Yuvo Model No. – 730 Voltage – 220V Capacity – 1500kg Price – US $900
6. Shrink Wrapping Machine Supplier: Ruian Yongxin Machinery Factory Model No. – BTH 450 + BM500L Dimension (L*W*H) – 3850*1500*1300mm Voltage – 220V/380V Power – 50Hz Price – US $3000
7. Grading and Sorting Table Supplier: Tianjin Sure International Trading Co. Ltd Model No. – Sure -CBM Dimension – 1000 - 10000mm Voltage – Customized Power – 0.18 – 2.5KW Price – US $ 3000
8. Platform Type Scales Supplier: Sanghai Uni-weigh System (Tech)Co. Ltd Price – US $ 1700 9. Tray Wrapping Machine Supplier: Shandong China Coal Group Ltd Model No. – HW450 Dimension – 540*680*200mm Voltage – 220V Power – 270W Price – US $ 1800
10. Hot Air Dryer
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Supplier: Henan Xingyang Mining Machinery Manufactory Model No. – ZT Dimension – Depends on the model Voltage – 380V Price – US $ 8,000
11. Washer Supplier: Zhengzhou Azeous Machinery Co. Ltd Model No. – AUSNW Dimension (L*W*H) – 3800*760*1200mm Voltage – 380v/50hz/3phase Power – 3.5KW Capacity – 500kg – 4000kg/hr Price – US $ 7000
12. Small cold store Supplier: Taizhou Nimbus Machinery Co. Ltd Price – US $3400
13 Grading and sorting table Automatic vegetable grading and sorting line (1 tonne per hour) Price-US$1000-27000 Supplier: RUIAN
13. Supper silent DEUTZ Solar generator (60KVA) Price-US$8900 Supplier –Fujian XINHENGXIN Motor Company Limited
Pack house project summary Plant capacity 10 Tonnes per day; 1800 tonnes annually No. of shifts One ( 8 hours per shift ) per day Working days in a year 180
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Capital Costs:
Land and building:
For building and civil work about 6,000 sq. feet of land will be required for this project and built up area required will be 1500 sq. ft. consisting of production hall, washing, packaging, storage etc. The cost of building and civil work would be US$16000 at a rate of US$10/square feet assuming land will be leased in the project.
Plant and Machinery:
The cost of plant & machinery is estimated at US$ 86000 including installation and commissioning. The installed production capacity will be 10 tonnes per day. The cost estimates for plant & machinery has been worked out based on the cost figures available from recent orders paced for similar items in the recent past, duly updated to cover the price escalation in the intervening period. These costs are given in the following tables:
Plant and Machinery
S. No. Particulars Qty. Rate (US$) 1. Solar generator 1 8900 2. Chain Pulley Block 1 1200 3. Motorized conveyor for bulk material handling 1 1300 4. Hydraulic pallet lift manual 1 250 5. Box strapping machine 1 250 6. Electronic weighing machines (1500Kg.) 1 900 7. Shrink Wrapping Machine 1 6000 8. Grading & Sorting Table 1 3000 9. Inspection Tables 3 300 10. Platform Type Scales (30kg) 2 1700 11. Platform Type Scales with Printer (15 kg) 10 150 12. Platform type scales (120 kg ) 5 100 13. UPS for above Machines 5 200 14. Tray Wrapping Machine 1 1800 15. Hot Air Dryer – for Removing water applied Externally 1 8000 16. Waxing Unit 1 2500 17. Washer 1 7000 18. Automatic vegetable grading and sorting line (1 tonne per hour) 1 15000 19. Packaging machine, Pouch sealing machine 1 170 20. Cold Storage 1 7000 21. PU Building for Pack house (1500 sq. ft.) 1 16000
22. Ethylene Generator 3 nos. (Sure Ripe) 1 200 23. Ethy-gen II Concentrate (45 cases) 1 200 24. Gastech. Air Sampling Kit Unit 1 no. 1 1 180 25. Ethylene Monitoring Tube - 1 Box 1 180
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26. Carbon di-oxide Monitoring Unit 1 400 27. 1 0.04 0.04 30 Additional Dryers for Removing Moisture- 1MT Per Day 1 120
28. Pallets and Bins 3000
Total 86000
Misc. Fixed Asset Costs: US$ 21500 has been estimated under the heading of miscellaneous fixed assets. The details of electrical installations for power distribution have been considered commensurate with the power load and process control requirements. Other miscellaneous fixed assets including furniture, office machinery & equipment, equipment for water supply, office stationery, telephone and refreshment, workshop, fire-fighting equipment, etc. will be provided on a lump sum basis as per information available with the consultants for similar assets. The details of miscellaneous fixed assets and their associated costs are been shown in table below:
Miscellaneous fixed asset cost
S. No. Particulars Qty. Rate (US$)
1. Office Equipment 1 2000 2. Furniture and Fixture 1 3000 3. Miscellaneous Accessories 1 2000 4. Vegetable Display Crate 50 200 5. Display Board 5 60 6. Fire Fighting 1 70 7. Computer with Accessories 2 1000 8. ERP System 1 10000 9. Water Treatment Plant – 500 litres per hour 1 1000 10. Loading Tempo 1 250 11. Electrical and water lines Installation 1 2000 Total 21500
Pre-Operative Expenses:
Expenses incurred prior to commencement of commercial production are covered under this head that total US$ 29700. Pre-operative expenses include establishment cost, rent, taxes, travelling expenses and other miscellaneous expenses. It has been assumed that the funds from various sources shall be available, as required. Based on the project implementation schedule, the expected completion dates of various activities and the estimated phasing of cash requirements, interest during construction has been computed. Other expenses, under this head have been estimated on a block basis, based on information available for similar projects.
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Pre-Operative Expenses
Sr. No. Particular (for 1 year) Amount (US$)
1. Interest up to production @ 16% on term loan amount of US$ 138000 (30% 22000 of total project cost) 2. Electricity charges during construction period 1200 3. Marketing Launch Expenses 1000 4. Technology Know-how and consultancy fees 5000 5. Training expenses 1500 6. Travelling Expenses 1000 Total 29700
Cost of raw material:
Based on a processing capacity of 10 tonnes per day taking into account and 180 days of working per year, the annual raw material consumption of the pack house is 1800 tonnes. The cost of fresh cucumber based on its average selling price as determined through interview with randomly selected farmers and converting it into US$ (with conversion rate of one US$=135) is $177.8/tonne. Adding US$20 per tonne transportation cost from the field to pack house, the raw material cost for pack house would be US$197.
Cost of raw material Particulars Rate per tonne (US$) for the Qty. (Tonnes) per Raw material cost raw cucumber at the season (US$) wholesale/pack-house Cucumber 170 1800 354600
Land Lease Charge:
Required land is 6,000 sq. ft. which has been considered on lease @ US$300 per annum for first three years and @ US$330 for the fourth year and subsequently @10% increase every year.
Land lease charges S. No. Year Lease charges Per annum (US$) 1. 1st year 300 2. 2nd year 300 3. 3rd year 300 4. 4th year 330 5. 5th year 353 Total 1583
Electricity and Water Consumption Charges:
The unit cost of electricity has been considered @ PKR.20.70/ unit assuming that the entire power requirement is met from the grid. A power supply of 60 KVA is deemed appropriate. The expense on water supply, treatment and distribution has been suitably considered, based on
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the tariff by water and sanitation agency (WASA) for per month consumption of water tariff of @ 92.82 PKR/thousand gallon. Water requirements are approximately 500 gallons per day.
Electricity and water consumption charges S. No. Description Amount Per Annum (US$) 1. Power Consumption 4000 2. Water Consumption 200 Total 4200
Human Resource Cost
One pack house manager, one accountant for six months, one supervisor for six months technical staff Salaries & wages (including benefits) for different categories of employees have been considered based on present day expenses being incurred by other industries in the vicinity. The breakdown of manpower and incidence of salaries & wages are detailed in the table Salary & Wages. Salary & wages are increased @ 5% every year
Salary and wages Sr. No. Description Requirement Salary/month (US$) Salary/annum (US$) 1. Manager 1 750 9000 2. Accountant 1 520 6240 3. Supervisor 2 740 8880 4. Skilled Workers 4 1200 1440 5. Driver 1 370 4440 6. Security Guard 1 225 5400 Total 3805 48360
Cost of Project
Sr. No. Particular Value (US$)
Fixed costs
1 Plant and Machinery 86100
2 Misc. Fixed Assets 16380
3 Pre-operative expenses 28700
Operating costs
1 Cost of raw material 354600
2 Land lease charges 1583
3 Electricity and water consumption 4200
4 Salary and wages (For 180 days) 48360
5 Margin money for working capital 1500
6 Contingencies 5% of fixed assets 819
Total variable costs 542242
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Project Income Statement
Revenues Year0 Year 1 Year 2 Year 3 Year 4 Year 5
Revenue (US$)
Quantity of cucumber that goes in 1800 1800 1800 1800 1800 value addition (tonnes) Price of the value added cucumber 220.00 220.00 220.00 220.00 220.00 (US$/tonne) Total revenues (US$) 396000 396000 396000 396000 396000 Direct variable costs
Raw material price 170 170 170 170 170
Raw material cost 306667 306667 306667 306667 0
Packing costs (@PKR20 per 20 kg box) 13333 13333 13333 13333
Labour cost 48360 48360 48360 48360
Electricity and water 4200 4200 4200 4200
Maintenance (1% of the machinery, 1362 1362 1362 1362 equipment and furniture cost) Land lease charges (10%) increment on 100 100 105 110 116 annual Marketing (US$20/tonne) 3600 3600 3600 3600
Office administration 613 613 613 613
Total variable cost 378406 378411 378416 378421 170
Gross profit 17594 17589 17584 17579 395830
Indirect fixed cost
Machinery -136200
Licensing and regulatory fee -150 0 0 0 0
Total -136350 0 0 0 0 Grand total cost -136350 378406 378411 378416 378421 0 Net profit (Net cash flow) -136350 17594 17589 17584 17579 396000
NPV 8.5% 170,153 IRR 32%
Project Viability:
The Internal Rate of Return of the project is estimated at 32%, which is significantly higher than the bank return rate of 16%. Hence, the project is deemed financially viable. The NPV of the project is positive (US$170,153) at a discount factor of 16% during the first 5 years of operation considered. This implies that the project generates sufficient funds to cover all its cost, including loan repayments and interest payments during the five years’ period. This also indicates that the project is financially viable over the long term.
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